Gartner finds lukewarm response to SaaS
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The survey of 333 enterprises in the UK and the US found that organizations were, on average, "somewhat satisfied" with SaaS (software-as-as-service), while only about one-third of those surveyed planned to expand their usage of SaaS, Gartner found. The survey was carried out in December 2008 and published on Wednesday.
Gartner researchers said they were surprised at the results of the survey, given that many — including Gartner itself — have been predicting a greater uptake of such services as a result of the current tough economic conditions.
"At a time when SaaS is becoming more of a consideration for more enterprises, the results of this survey will be somewhat disquieting for SaaS vendors," said Gartner principal research analyst Twiggy Lo, in a statement.
On average, respondents ranked their experience with SaaS at 4.74 on a seven-point scale, with all 16 aspects of SaaS receiving scores in this range, Gartner said. The aspects studied included, in order of highest to lowest satisfaction: functionality for business users, provider responsiveness, reliability of performance to technical specifications, service reliability and support compliance and risk management.
Respondents who had considered using SaaS, but decided not to, said they made this choice due to high cost of service (42 percent), difficulty with integration (38 percent) and technical shortcomings (33 percent), Gartner said.
"These findings contradict the general impression that SaaS could help alleviate costs and also that it does not require much integration and technical requirements," Gartner stated.
Fifty-eight percent of organizations said they would maintain current levels of SaaS over the next two years, while 32 percent said they would expand, five percent would discontinue and five percent would decrease levels.
Gartner said SaaS providers must find ways of delivering deployments that require less technical support, and must come up with integration strategies that work better with customers' heterogeneous IT environments. "Vendors must reaffirm the fundamentals of the SaaS model — that SaaS solutions are lighter, simpler, more intuitive, more agile and more modest," Gartner stated.
The results are not completely unexpected, and are due in part to shortcomings with billing and provisioning, according to Soeren von Varchmin, vice president for SaaS at virtualization company Parallels.
Current billing and provisioning systems used by SaaS providers create unneeded complexity for customers when they make adjustments to their services, von Varchmin said.
"End users must have 'self-service' SaaS, meaning they are free to administer their own services instead of constantly having to contact the vendor to purchase or remove applications," he said in a statement. "Without automation, SaaS is not only unprofitable for vendors but unattractive for end users, as it's difficult to realize the cost benefits."
Last month, Gartner recommended service providers to invest in SaaS as a delivery technology, as a way of cutting costs.
This article was originally posted on ZDNet UK.
Talkback Most Recent of 3 Talkback(s)
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Yep Gartner knows nothing
Typical Gartner. They recommend a technology that nobody wants. They are a group of stooges, and the only people who listen to them are brain dead CIO's.
Unix Pimp8th Jul 2009 -
More Emphasis on the second "S"
I think this was paid research from an on-premise vendor. When a GM from SAP starts using its findings it makes me wonder....
In my opinion, SaaS is a disruptive technology but many SaaS companies pay too much attention to the first "S" in the term and not enough to the last one. In other words, selling too much software and not enough service. Many vendors are too pre-occupied with going after market share and not much of anything else. A lot of the concerns mentioned in that study have to do with service.
What many SaaS vendors need to realize is that they are really selling a mutually profitable relationship over the long term and not just software, (Duh! It's subscription based!)
--Samantha
www.datastay.com
(...our tagline is "Build Success" because we know that our success is directly linked to the success of our customers!)
samantha_datastay15th Jul 2009 -
RE: Gartner finds lukewarm response to SaaS
Technology experts are finally starting to admit that SaaS is being less favorably received then anticipated to spite their constant conjecture to the contrary. But was this really any more then an attempt to let the wolves in our door and promote SaaS in the first place. I can't believe it was a surprise to anyone that the slow economy didn't somehow boost service based applications into the spotlight as the next big thing replacing traditional operating systems, office suites, and productivity tools when the keystone to SaaS succeeding was trust of the service provider. In a bad economy, who is going to trust someone to own your data who can charge you anything to host it and can keep it away from you if you can't pay your bill.
We're in survival mode here. The experts have it backwards. SaaS favors a robust economy, not a weak one and their predictions on SaaS taking off in an economic slow down were counter-intuitive and ridiculously based on companies choosing between legally updating all their CALS, service contracts, and software or going with a less expensive subscription based service.
But with full time IT people being asked to trim their budgets or risk being replaced by consultants...using an old workstation as a new server, running on less then legal copies of Office, or having less then perfect backup procedures becomes quite commonplace and acceptable. It's not like the same job can't be done on old software if the alternative is loosing my job.
So SaaS like any software amounts to a cost, and like any other cost, it will suffer in hard economic times no matter what "they" say.
Socratesfoot9th Jul 2009
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