Survey: User optimism for SaaS high

Ninety percent of organizations intend to maintain or grow their application deployments based on the software-as-a-service model, says Gartner.
Written by Victoria Ho, Contributor

Optimism around software-as-a-service (SaaS) appears strong, with a vast majority of 90 percent of organizations 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 which found cost-effectiveness and ease and speed of deployment as "primary reasons" for enterprises adopting SaaS.

Companies moving to SaaS also looked to the model to help lower their TCO (total cost of ownership) and solve issues with "unmet performance expectations" with their on-premise implementations.

Sharon Mertz, research director at Gartner, said 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 organizations 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.

Asia focused on TCO
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.

In comparison, the figures were 5 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 organizations polled said they were transitioning, compared to a global average of 37 percent.

In India, a high 70 percent said they were transitioning.

"When asked why their organizations 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.

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