How SaaS will impact 6 key software categories

By Liz Herbert and Andrew Bartels, Forrester Research, CIO |  Business Intelligence, business intelligence, CIO role

As more sourcing executives consider incorporating SaaS solutions into their overall technology vendor landscape, the potential to significantly disrupt the current software market grows. And while SaaS adoption is expected to expand in the coming years, the challenge for sourcing professionals will be a lack of uniform adoption across the whole software market. In some software categories, SaaS will be a disruptive technology, in others the only option, and in many cases SaaS will have minimal impact.

To navigate this changing landscape, Forrester analyzed over 120 software products, assessing the degree to which these products are being offered as SaaS solutions today, and the likely adoption in the future.

Overall, SaaS will more than double from 7% of software investment in 2010 to 16% in 2013, so it's not surprising that many of the assessed product categories will change to have a greater or smaller number of SaaS solutions during that time. Here's a look at where SaaS has-and has not-become a factor in the software market:

1. IT Management Applications: Despite the threat of losing jobs to cloud providers, IT is increasingly recognizing that cloud solutions can save money and allow workers to focus on what is important to them in areas of core competency, business value, and differentiation. In fact, IT areas such as service desk, IT asset management, and capacity planning have already adopted SaaS, working with Service-Now, HP, CA, and BMC, rather than traditional vendors. SaaS is also gaining market share in security software, where users benefit from rapid upgrades (able to stay real-time with new threats) and network detection (able to leverage the power of the network for greater threat detection).

2. CRM Software and productivity applications: Desktop and collaboration applications are well-suited for SaaS. Their broad user base - including employees, customers, and partners - makes accessibility a must. Some CRM attributes that hinder SaaS adoption include a large amount of data, high security, and varied maturity of products. Although blogs and wikis are almost fully SaaS, and email and collaboration are following suit, content management programs are still relying mainly on traditional services.

3. ERP and Supply Chain Software: Very few ERP and supply chain functions have taken on a SaaS model, and not many are likely to change over the next few years. Many of these categories are still seen as too mission-controlled, custom, or heavily integrated to successfully use SaaS. One exception to this is ePurchasing/eProcurement, which has greatly shifted over to SaaS in new product categories like services procurement, automated spend analysis, supplier network services, and supplier risk and performance management.


Originally published on CIO |  Click here to read the original story.
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