95% of surveyed enterprises using SaaS, says Gartner

Software as a service (SaaS) seems to be more widespread than is usually held to be.

A new Gartner survey of 270 worldwide enterprises reveals that 95% of the surveyed organisations expect to continue using or further expand the use of SaaS solutions.

"SaaS applications clearly are no longer seen as a new deployment model by our survey base, with almost half of those surveyed affirming use of SaaS applications in their business for more than three years" said Sharon Mertz, research director at Gartner.

In terms of popularity for SaaS usage, the survey showed that e-mail, financial management (accounting), sales force automation and customer service, and expense management are the most popular in terms of current use, with more than 30 percent of the survey base using these types of applications.

Kind findings from the survey:

  • Integration requirements, change in sourcing strategy and high total cost of ownership (TCO) are the top three drivers for SaaS.

  • Most companies still do not have policies governing the evaluation and use of SaaS. Only 39 percent of respondents indicating that such a policy or process exists
  • 53 percent of organisations expect to increase investment levels slightly and 19 percent significantly. However, ¼ of respondents expect investment levels to remain about the same, and 4 percent looking at a slight decrease in investment levels.
  • On new investments on on-premise and SaaS investments, 72 percent of respondents believe SaaS investments will increase, while 45 percent hold the same notion about on-premises budgets.
  • Regionally, North America and Asia/Pacific respondents indicated a stronger interest in procuring solutions via a SaaS model, and, compared with those in Europe, showed greater confidence that their organizations will increase investments in products offered as SaaS or through a subscription model through year-end 2010.
  • 16 percent of respondents said that they are returning from SaaS to on-premises solutions. The majority of organizations in this position were facing significant integration requirements and became unsatisfied with a TCO that became too high.
  • Despite the continuous adoption of SaaS across regions, more than one-third of the respondents have noted concerns on their recent SaaS deployments. Most respondents with these issues are located outside North America, specifically in Asia/Pacific where high-speed high-availability networks, are not as readily available as in North America.

"These issues aside, organizations are becoming more savvy when it comes to renegotiating their SaaS contracts" Ms. Mertz said. "A key survey finding was that more enterprises are renegotiating contracts for greater functionality, additional users and improved financial terms. Thirty percent of respondents said that they had renegotiated their SaaS contracts before the end of the initial term"

Arun Mysore

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