UK companies taking to software-as-a-service

Customer relationship management is the most popular SaaS application

UK businesses are leading their German counterparts when it comes to the adoption of software-as-a-service (SaaS), but falling behind France, according to Gartner's latest survey of the market.

Around 68 per cent of UK respondents to a poll said that their firm uses SaaS enterprise applications, compared with 71 per cent in France and 45 per cent in Germany.

Gartner pointed out that SaaS applications have been in use for slightly longer in France. Just four per cent of French respondents claimed to have used SaaS for less than a year, compared with 17 per cent in the UK and 21 per cent in Germany. Gartner added that more French employees actually use SaaS when it is available.

Customer relationship management (CRM) applications are the most popular SaaS products across all three countries surveyed, owing mainly to high media exposure of vendors such as Salesforce.com. CRM applications are widely used for processes such as sales automation, marketing automation and customer service support.

Gartner analyst Chris Pang believes that enterprise resource planning (ERP), content communications and collaboration (CCC) and supply chain management (SCM) may all soon close the gap. ERP is more focused on specific areas of business process support, like expense management, talent management, recruitment, web conferencing and procurement.

"The penetration and use of ERP, CCC and SCM applications should not be underestimated. Many businesses already use some of these applications within a part of their organisation, and vendors looking to sell SaaS applications should find that most businesses are now more open to using SaaS than they were five years ago," said Pang.

The analyst believes that the difference in SaaS adoption levels will close as users follow through on plans for general SaaS adoption throughout 2009.

"We believe that North American vendors have enjoyed greater success in the UK because less effort is required to localise products and sales/marketing strategies," said Pang.

Other European countries are also willing adopters of SaaS applications, according to Pang, who said that "international vendors not already active in the French and German markets should certainly investigate opportunities for growth here".