Resistance fades as SaaS goes mainstream

Research into SaaS by Saugatuck Technology has uncovered some dramatic changes in attitudes over the past year, identifying what it calls an adoption tsunami -- and a rapid decline in resistance to SaaS.
Written by Phil Wainewright, Contributor

Saugatuck Research has been dribbling out findings from its latest annual SaaS research exercise, which is due for publication in full in the next week or so. I've been having a read through the various alerts and extracts because I'll be doing a webcast later on today with Saugatuck's CEO Bill McNee (pictured) and vice president Mike West.

Bill McNee, founder and CEO, Saugatuck Technology
I don't normally flag up these webcasts here as it's part of a series I'm recording for WebEx on the theme of Work 2.0 (see disclosure page for a full list of my client work). This one however might be of special interest to readers here because of the insights into Saugatuck's findings.

Saugatuck has uncovered some dramatic changes in attitudes over the past year (the survey interviews were done in January and February this year and the results compared to similar interviews done over the same timeframe in 2006). Most notable:

  • Adoption is surging. More than 26% of respondents worldwide have one or more SaaS solutions in place, up from 11% last year, and projected to reach 47% by the end of 2007
  • Resistance is fading. Just 8% of companies said they had no plans to implement SaaS this year, down by more than two thirds from last year.
  • Deployments are multiplying. Large enterprises that have adopted SaaS now have 3.4 applications deployed, with one in seven having more than 10 SaaS applications.
  • Europe poised for breakout. The proportion of European companies planning to adopt SaaS has doubled this year to 34%, catching up fast on North America's 46% adoption rate. (That's good news by the way for prospective attendees at the upcoming OnDemand Europe conference in Amsterdam, May 30th - June 1st, where I'll be speaking).

Saugatuck calls this an "adoption tsunami", and is predicting adoption rates of 60-75% by 2010. Speaking at last week's SaaScon conference, McNee repeated Saugatuck's view, which I first reported last month, that "We've already blown through the tipping point." He added: "This is not a one-trick pony. There is broad and deep adoption across many application areas."

Saugatuck also makes some predictions about how adoption of SaaS will affect businesses, and that's the angle I'm most interested in exploring in today's webcast, aligning with the Work 2.0 theme of the series. Once mainstream adoption takes hold, McNee and his colleagues argue that SaaS will raise important business issues for users, such as:

  • integrating SaaS workflows with enterprise business processes
  • collaboration across business units or other enterprises
  • customizing and personalizing business workflow
  • utilizing built-in analytics and mix-and-matching data sources

We'll be discussing the potential impact on how people organize their work and the implications for business transformation and innovation. The webcast takes place at 11:30am PDT / 2:30pm EDT / 7:30 pm BST and will be available afterwards as a recording or for download as a podcast.

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