Research outfit IDC expects the payroll service outsourcing market to grow 7% a year through the rest of the decade.

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"What you get is a recent college graduate loading Linux on some old system that's kicking around, and it's free, " said Dan Kuznetsky, program director for IDC's operating environments service.

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The Europe, Middle East and Africa accounts for just a small piece of the software-as-a-service market, 13% last year, according to IDC, versus 74% in the Americas.

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IBM's Web focus also exploits the timely appeal that software-as-a-service has to IT managers' wallets in the midst of the current economic downturn, says IDC Research Analyst Frank Genz.

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