Within five years, a quarter of all software sales won't come in traditional off-the-shelf packages as they do today, but they will be hosted on remote servers, with users paying per usage, one research firm states.

Software as a service (SaaS) represents approximately 5 percent of business software revenue in 2005 and but research firm Gartner believes the trend is shifting towards service oriented models.

The trend has clearly begun to change, said Robert DeSisto, research vice president for Gartner. For example, SaaS providers are enhancing their software functionality and improving the ease with which companies can customize and more uniquely configure SaaS software to meet business requirements.

SaaS is hosted software that are consumed in a one-to-many model by all contracted customers, at any time, on a pay-for-use basis, or as a subscription based on usage metrics.

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