Gartner sees high levels of SaaS popularity
Published: 04 Dec 2008 12:09 GMT
Optimism around software-as-a-service appears strong, with 90 percent of organisations expecting to maintain or grow their use of software based on the model, according to Gartner.
The analyst company recently released a report on a global user survey that found cost-effectiveness, and ease and speed of deployment were "primary reasons" for enterprises adopting SaaS (software as a service).
Companies moving to SaaS also looked to the model to help lower their TCO (total cost of ownership) and to solve issues with "unmet performance expectations" with their on-premise implementations.
Sharon Mertz, research director at Gartner, said on Wednesday in a statement: "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."
Gartner's survey indicated that more than 40 percent of organisations were already onboard with SaaS for over three years, "implying a growing fluency with the model within the end-user base".
The growing fluency is also leading companies to demand higher levels of functionality and scale, leading some to renegotiate contracts early to scale up their SaaS applications, said Mertz.
US shows 'greater confidence'
Gartner said North American respondents showed "greater confidence" in SaaS compared with those in Europe and in the Asia-Pacific region. In North America, 15 percent of respondents said they expected new SaaS investments to increase "significantly" and 62 percent expected slight increases.
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In comparison, the figures were five percent and 55 percent, respectively, in the Asia-Pacific region and 15 percent and 49 percent in Europe.
However, while future investment appeared brighter in North America, a higher proportion of Asian businesses indicated that they were in the process of shifting on-premise deployments to a SaaS model. Half of the organisations polled said they were transitioning, compared to a global average of 37 percent.
In India, 70 percent said they were transitioning.
"When asked why their organisations were transitioning from a current on-premises solution to a SaaS solution, respondents' consistent message was that the TCO [for on-premise solutions] was becoming too financially onerous."
Together with budget cuts next year, Gartner expects the focus on driving down TCO to foster greater demand for SaaS compared to on-premise purchases.
Credit: Survey: User optimism for SaaS high from ZDNet Asia
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