Cloud vendors "argue that subscription pricing also turns software from a capital expenditure to an operating expense, which for some companies provides a more favorable tax treatment," he wrote. "However, vendors of traditional on-premises software also can easily provide the same benefit, turning a capital investment into an operating expense by financing the software license purchase as an operating lease."
Respondents also listed their concerns with SaaS, with data privacy risks coming in highest, followed by security, loss of control, integration challenges and performance.
The survey found that SaaS grew overall in 2012, with 49 percent of organizations having systems in place compared to 47 percent in 2011.
Expect this trend to continue, Scavo wrote."We believe that within the next five years, new SaaS application sales will exceed new on-premises application sales," he added.
The study was based on information collected by Computer Economics, a research firm where Scavo serves as president. Computer Economics surveyed some 244 companies from around the world between July and September 2012. The companies' average yearly revenue was US$2.1 billion, while the median was $287 million, according to the study.
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com