Software as a Service

The State of SaaS

Jessica Thornsby

Gartner report encourages organisations to be wary of SaaS, prompting some bloggers to ask ‘is the SaaS experiment over?’

Gartner have published a report encouraging organisations to weigh up the
benefits and negative Aspects of SaaS, before taking the plunge,
which has sparked a flurry of blog posts asking ‘is the SaaS
experiment over?’

The Gartner report listed limited infrastructure
overheads and reduced short-to-medium-term total cost of ownership
as positives, but noted that third-party application tools were
limited and that SaaS applications cannot be counted as assets on a
balance sheet. In the past, Gartner have also claimed that the five-year
total cost of ownership for SaaS, is more expensive than on-premise

“SaaS is not a panacea,” states the report, “software as a
service (SaaS) will have a role in the future of IT, but not the
dominant future that was first thought.” This seems to be based on
Gartner’s estimate that SaaS grew as a percentage of total
enterprise spending by 0.6% from 2008 to 2009. Neil McAllister
picks up this figure in his own blog, interpreting it as enough to make an
organisation hesitate, before rolling out a new SaaS offering.
McAllister also notes that many organisations have concerns about
using SaaS for mission-critical applications, and often feel more
secure relying on on-premise software instead.,
Google and Rackspace have all experienced outages, and two weeks
after launching a business version of the Google app engine, Google
admitted that the performance had been “chronically deficient for weeks.”

However, Jeff Kaplan has hit back with a blog that acknowledges the public failings
regarding SaaS, but points out that traditional, on-premise
software has also suffered plenty of outages and performance
problems over the years. “The fact is that the SaaS ‘experiment’ is
definitely over. It is now a mainstream movement,” he


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