Gartner: SaaS to grow in 90% of organizations
Nine out of ten companies plan to grow their use of software-as-a-service (SaaS) in the next year, according to a survey by Gartner.
More than one third of respondents (37%) plan to replace on-premises software with SaaS to drive down total cost of ownership (TCO), Gartner found.
Those surveyed cited cost-effectiveness and ease of deployment as primary reasons for adoption. Other major drivers included replacing on-premises solutions that had not met performance expectation, or changes in sourcing strategy.
The survey involved eight major countries worldwide and 258 IT executives that make purchasing decisions of enterprise software. Most respondents were either currently using SaaS, or planned to use it within the next 12 months.
European firms trailed behind North American companies when it came to plans to increase investments in SaaS or subscription model products. But 49 percent of European respondents said that they expect new investments to increase slightly and 15 percent expect significant increases in investments. This compares to 62 percent and 15 percent respectively in North America. The US has been an early adopter of SaaS, with more than 20 percent of respondents indicating use for five years or longer and 60 percent having adopted it in the last three years.
Sharon Mertz, research director at Gartner, said: "Use of SaaS has been evolving during the past decade and the SaaS model has become increasingly popular over the past three or four years."
The survey indicated that more than 40 percent of organizations have used SaaS for more than three years.
"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 organizational footprint expands," she said.
Mertz added that the current global recession, which will force firms to cut discretionary spending in 2009 and 2010, would see budgets redirected from enhancing on-premises solutions towards SaaS solutions.
Despite the increase use of SaaS, most respondents to Gartner's survey said no governance policies had been developed. Only 38 percent of total respondents that are currently using SaaS have a process or policy that guides the evaluation, procurement and deployment of SaaS. The majority of these organisations are based in Europe and North America. Another 26 percent had no plans at all to address this issue.
The full report, titled "User Survey Analysis: Software as a Service, Enterprise Application Markets, Worldwide, 2008", is available on Gartner's website.
» posted by ITworld staff
Computerworld UK
Sign up for ITworld's Daily newsletter
Follow ITworld on Twitter @IT_world
On Twitter now
saas
Powered by TwitterOn Twitter now
saas
Brian Proffitt
Microsoft/Novell: Breaking Down the Coupon Numbers
Esther Schindler
Drupal's Dries Buytaert on Building the Next Drupal
Tom Henderson
Top Ten General Operating Systems Rants
pasmith
PS3 motion controller delayed; goes up against Project Natal
sjvn
Neolithic Windows security hole alive and well in Windows 7
claird
Perl source code comparison makes for good reading
mikelgan
Cell phones don't create stress or interrupt much
Sandra Henry-Stocker
How to: The Unix Interview
Where Google Chrome security fails: the password
I heard mention that the Chrome OS will have some sort of encryption available a la bitlocker. If it's possible to encrypt personal data using another password or key, then it may have potential for very secure data.... And Ubuntu has an 'encrypt home directory' option, perhaps google should follow suit.
- Dann
Join the conversation here
Quick, practical advice for IT pros. Made fresh daily.
- Ubuntu advances: Why Ubuntu server installations will surge in 2010
- Social media marketing: How to make friends with benefits
- More...
Want to cash in on your IT savvy? Send your tip to tips@itworld.com. If we post it, we'll send you a $25 Amazon e-gift card.
Centralized Database
Trust Group of Companies recognized across the region as being an innovative and business – focused organization with well experience human resources; Trust Group, one of the leading insurance and reinsurance companies with operations in the Middle East, Gulf Countries, North Africa and the Far East.We had five years plan to develop the required software to handle our business to reduce our cost that enabled us to gain competitive advantage.
We continue to develop, maintain, and enhance the Group IT needs through qualified IT personnel. We are very conscious of the fast developments in the area which provides us valuable and timely support across the entire Group for better assessment and decision making.
Unfortunately, the telecommunication in certain countries where we are operating is not up to the standard, but we manage to handle such cases with the available tools and protocols.
We implemented the centralized database within every country we operates for butter control, to stay away from fraud, and to provide the best of our service to our clients and partners.
I do agree that most wise companies and organization plan to grow their use of "Software as a Service".
Project Awareness and Control
In response to todays business challenges DOVICO is barely keeping up with the demands from companies with control and awareness in mind. Needing to take charge of cost overuns, the ever tightening budget as well as accountability to other departments is extemely easy with DOVICO Timesheet. With the SaaS model selling for $9.75 per month, the ROI for your projects is a no brainer.Take control and be aware of your costs with DOVICO Timesheet, here is what some of my customers tell me:
"This week we went live with Dovico in our production environment with approximately 200 users, and have been receiving very positive comments on the “user friendliness” of the timesheet portion of the application. A definite improvement from our prior time tracking tool! As we are using the tool to manage all of our project costs as well as our capitalization spend".
"They set a great example for all project team members and other vendors to follow".
" ... allowed us to identify areas where we have opportunities to improve our staffing mix to resolve resource constraints. It has also allowed us to identify areas where we can improve our processes and by doing so, our efficiency and effectiveness.
SaaS Model ideal for Real Estate Rental Property
I agree with the survey results, the growth of SaaS as an alternative to owning software is growing. This is especially reverent for smaller organizations that cannot afford the cost to invest in technology that larger firms have resources are able to do. Smaller organizations are ideal environments to leverage technology to run their business and to be competitive. A prefect example is small rental property owners and managers, sometimes characterized as Independent Rental Owners. They represent the largest segment of rental properties in the US, but have the least access to technology to better run their business. DIY Real Estate Solutions www.diyresolutions.com is a SaaS model for the property managers and owners of small rental portfolios. Their Web base solution integrates all of the technology (Web Portals, Online Rent Payments, Online Advertising of vacant units, Online banking and the tenant accounting) in one platform in a easy to use solution that is affordable. So for a very low cost a Property Management Company that caters to small portfolio’s of rental properties (from 10 to 2,000 units) can have access the power of technology at a fraction of the cost. Similar to how we access utilities, like electricity, basically we walk in and turn the switch on and there is light (but behind the scenes there is a significant investment to generate the power that most of us could not afford to create), for the small owners and managers of rental property they would just plug into the internet, wherever they are and immediately access the technology to run their business without any upfront cost.