Some 90 per cent of enterprises are planning to maintain or increase SaaS deals
Gartner reports boom in software-as-a-service
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02 Dec 2008, Dave Neal , V3
The majority of enterprises expect to increase their use of software-as-a-service (SaaS) in the coming months and years, according to a survey from Gartner.
The analyst firm polled a number of enterprises across the world and found that 90 per cent are planning to maintain or increase their investments in SaaS. Respondents cited cost-effectiveness, and ease and speed of deployment as some of the key reasons for the decision.
Gartner found that, where SaaS is a planned deployment, the majority of respondents gave the replacement of on-premises solutions and new online implementations as their reasons.
"Use of SaaS has been evolving during the past decade and the model has become increasingly popular over the past three or four years," said Sharon Mertz, research director at Gartner.
"Our survey indicates that more than 40 per cent of organisations have used SaaS for more than three years, implying a growing fluency with the model within the end-user base.
"Users are demanding higher levels of functionality, sometimes prompting organisations to renegotiate their contracts early to opt for more feature-rich solutions, or to add more users as the organisational footprint expands."
The research also identified geographical differences in SaaS usage. Gartner found the most confidence among users in North America, where 62 per cent expect to increase SaaS deployment in some way and 15 per cent expect to increase their investments significantly.
The figures are slightly lower for Europe, coming in at 49 per cent and 15 per cent respectively.
Interestingly, Gartner found that 37 per cent of respondents are changing their IT environment completely, moving from current on-premise systems to a SaaS solution, and that the majority cited financial reasons for the decision.
The analyst firm predicts that this thinking will lead to greater adoption over the coming months.
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Do you agree?
Response - Gartner reports boom in SaaS
In response, it is clear to see why the majority of enterprises expect to increase their use of software-as-a-service (SaaS) in the coming months and years. We've all heard about the "credit crunch" and fears of an economic slowdown, even a recession. Rising oil and food prices, together with a slowing economy, have put pressure on small businesses - by raising costs, lowering available credit and generating increased competition. The worries and fears created during this time perhaps only highlight the advantages of SaaS and the growing need for such applications, particularly for smaller companies.
SaaS is the secret weapon in the battleground for business.
It removes the need for upfront capital investment as well as upgrade costs, as it allows you to use the latest business-grade software developed specifically to meet your needs, free or on a subscription basis. Dedicated IT support is expensive and labour-intensive - a luxury few small businesses can afford. With SaaS, businesses no longer need to manage and support critical business applications in-house, therefore reducing cost and increasing flexibility.
As a result, UK SMEs can benefit from services previously only available to larger companies - an important factor in today's current market.
Chris Lindsay, GM, BT Business Applications
Posted by Chris Lindsay, GM, BT Business Applications, 05 Dec 2008