Software-as-a-service failing to impress

Gartner's research found that users are 'generally somewhat satisfied' with SaaS

Software-as-a-service (SaaS) has been over-hyped, and is failing to impress many customers, according to recent research by Gartner.

The analyst firm's Dataquest Insight: SaaS Adoption Trends in the US and the UK report reveals that, while the technology is better understood as a viable model, it is not translating into the panacea that many believed it would be.

"Our research findings did not exactly provide a ringing endorsement of SaaS. In fact, I would go as far as to say that satisfaction levels among SaaS users are little more than lukewarm," said Ben Pring, research vice president at Gartner.

"Although macroeconomic factors would seem to favour SaaS providers, almost two thirds of respondents said that they planned only to maintain their current levels of SaaS in the next two years."

The research found that users are generally somewhat satisfied with SaaS, rating it with an average score 4.74 on a seven-point scale.

However, only 32 per cent of organisations plan to expand their use of SaaS over the next two years, while 58 per cent will maintain current levels. The remaining 10 per cent are split between decreasing and discontinuing their use of the technology.

The revelations came as little surprise to Rob Lovell, chief executive at hosted IT firm ThinkGrid.

"Despite the much talked about benefits of SaaS and cloud computing, many vendors are still pretty new to the whole services model, so it's understandable that there is frustration in areas such as reliability and post-sales support," he said.

"For SaaS to succeed, vendors must implement tried and tested practices such as 99.99 service level agreements and 24/7 telephone support from the outset. These processes have been developed over the years by traditional service p roviders, and significantly improved the customer experience."

When asked about the drivers behind SaaS adoption, 46 per cent of respondents to the Gartner survey cited 'technical requirements' as the top overall consideration, followed by 'security', 'privacy and/or confidentiality' at 33 per cent, and 'ease of integration' and 'functionality needed for business unit owners', both at 29 per cent.

Around 42 per cent of those who opted out of using SaaS said that it was too expensive, while 38 per cent reckon it would be too difficult to integrate with existing systems and a third said it did not meet their technical requirements.

"At a time when SaaS is becoming more of a consideration for more enterprises, the results of this survey will be somewhat disquieting for SaaS vendors," said Twiggy Lo, a principal research analyst at Gartner.

"Underwhelming customer satisfaction scores, hesitation over the true cost of SaaS solutions, and concerns regarding how successfully SaaS applications can be integrated with other applications all point to issues that will need addressing and resolving."

The report concludes that SaaS vendors must focus on actually delivering on the promise of a lower total cost of ownership, and reaffirm the fundamentals of the SaaS model, namely that it is lighter, simpler, more intuitive, more agile and more modest.