Speed, not savings, is key to SaaS

By Angus Kidman
Tuesday, 27 November 2007 16:16

Strategy

While saving money is often cited as the key driver for adopting software as a service (SaaS), ensuring better performance is often just as big a consideration, according to new research by the Yankee Group.

A survey of 213 global companies looking at how SaaS was being used in the business technology optimisation (BTO) market found that application performance and functional testing were common targets for SaaS deployment, Yankee Group enterprise infrastructure research director George Hamilton said during a press conference at the HP Software Universe conference in Barcelona.

Asked what the major drivers were for adopting SaaS, customers overall cited improved application quality and performance and faster time to value. Reduced cost was only third on the list.

Amongst companies looking at SaaS specifically for BTO applications, the ability to deploy without needing extra infrastructure and to reduce upfront costs were cited more often than by businesses looking at other SaaS deployments, the HP-sponsored research found.

A major inhibitor to the uptake of SaaS was the inability to account for such purchases within existing financial models, Hamilton said.

“To a lot of companies, this is just a new way of purchasing and deploying software. They have to adapt to that model.”

Another frequent concern was whether SaaS tools would integrate with existing infrastructure, an issue raised by almost half of those companies considering

“Companies do not want to deploy business technology optimisation in a SaaS model in isolation from how they deploy their other management tools,” Hamilton said

Results were broadly similar for companies around the world, though businesses in the APAC region were more concerned about the stability of suppliers while US buyers were more worried about security.

Choosing SaaS doesn’t necessarily have to represent an all-or-nothing decision, with many companies accessing some elements as a service but retaining control over the others.

“When we first started using SaaS, HP managed Business Availability Center wholeheartedly,” said Don Jackson, engineer for global shared services at US healthcare supplier Cardinal Health, which has run via a SaaS model for the past six years.

“As we’ve developed that internal competency, we’ve taken some of that control back.”

Disclosure: Angus Kidman travelled to Barcelona as a guest of HP.