More businesses are expected to outsource their software needs as the economy weakens.

The software-as-a-service (SaaS) sector can expect to double its annual revenues in the UK to £2.5 billion by 2011, according to researchers at BIW Technologies.

A survey of over 300 senior IT directors and managers found that 65 per cent of respondents felt that a weakening economy would increase SaaS use, citing three reasons: the speed it can be put in place, low cost and small up-front investment.

Currently, those surveyed outsource 15 per cent of their software requirements but over 70 per cent thought this would rise to a third by 2013.

The chief executive of BIW, Colin Smith, said: "More and more companies are recognising the benefits of SaaS to enhance their business and help cut costs in this challenging economic environment. There is also an increasing acceptance that using SaaS can help companies reduce IT-related risks, manage costs and respond more nimbly to changing software needs."

Experts in the industry have also noted that SaaS can reduce a company's carbon footprint, making it especially attractive to the property and construction sector, which is responsible for almost a third of waste produced by the UK economy.