Providing another sign--in addition to the recent huge quarter that Salesforce.com just had--that software-as-a-service is gaining traction, $9 billion ADP (Automated Data Processing, Inc.) announced that is acquiring Employease, a 10-year-old company that provides SaaS HR, payroll and benefits services for 1,500 clients, with more than one million client records under management. The two companies have been in a strategic partnership since 2004. Revenues for the private company grew by 55 percent year over year for its fiscal year ending in June 2006. According to the press release:
"This acquisition will build on our combined strengths and business momentum," said Vince Coppola, President, ADP Major Accounts Services. "Combining Employease's top-rated Web-based business solutions with ADP's industry leading payroll, HR and benefit services enables our clients to address many of today's most critical business issues, such as rising benefits costs, compliance and employee retention. We are excited to welcome Employease into the ADP family, and proactively meet the rapidly growing demand for hosted, on-demand services."IDC Research predicts worldwide spending on SaaS will grow to $10.7 billion by 2009, with a compound annual growth rate of 21 percent.