Though stock prices of publicly traded on-demand software companies have taken a beating recently, venture capitalists are betting big on the long-term trend.
Total VC investments in software fell by 12% in 2007 over the year before to $5.5 billion, according to Dow Jones VentureSource. But investments in on-demand software companies -- also known as software as a service, or SaaS -- shot up 27% to $902.6 million.
"We have a real conviction that the SaaS market is about to explode," said Gordon Ritter, a longtime software veteran and a founder of Emergence Capital Partners. "This is a fundamental growth trend."
