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 software.

“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 concludes.


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