Software-as-a-service market set to double

Stephen Withers
Thursday, 22 February 2007 08:28

Business IT - Technology

One fly in the ointment is that only a minority - less than 22 percent of the sample - could accurately define the SaaS model. While it is likely that this was simply an inability to articulate the concept among current users of SaaS, we have to wonder how much of the measured enthusiasm among would-be users is misplaced.

Stated barriers to adoption include concerns about security, loss of control, and bandwidth requirements.

On the other hand, on-premises applications are seen as expensive to run, with an average of 29 percent of IT budgets going on software maintenance. "Respondents also indicated they were struggling with software upgrades and staff shortages, said Wallace.

SaaS is seen as a way of reducing the total cost of ownership, and the savings made will redirected to new hardware or hardware maintenance.

(We would have expected hardware requirements to fall with the adoption of SaaS, but perhaps respondents have been forced to extend the life of existing hardware due to funding shortages.)

The research was conducted by ACA Research, and involved a phone survey of 120 senior IT executives and line-of-business managers between 25 October and 1 December 2006. Although the survey was sponsored by Salesforce.com, responses from the company's customers were calculated separately.