Worldwide SaaS spikes as adoption shifts from extending software to rip and replace

Nearly three-quarters of companies have started using SaaS in the past three years, a global survey has found.
Written by Nick Heath, Contributor

Business have dramatically increased their use of software as a service (SaaS) over the past three years, according to a global survey.

Nearly three quarters (71 percent) of the 399 organisations surveyed by Gartner have started using SaaS since 2009.

Individual businesses are making greater use of SaaS, Gartner said, with adoption patterns shifting from using SaaS as a way to extend on-premise applications to replacing applications with cloud alternatives.

Reasons for deploying SaaS vary worldwide. Asia-Pacific companies are deploying SaaS to access applications for the first time, while there is a growing trend for businesses in the US and EMEA to use SaaS to replace legacy applications.

Supply chain management, web conferencing, and social software suites were the most common services chosen by companies replacing on-premise systems. Customer relationship management and enterprise content management systems were the most common service used for new deployments.

Lessening the burden

SaaS is increasingly being used by business as a way to avoid expanding or replacing in-house datacentres, David Cappuccio, chief of research for the infrastructure teams with Gartner, told the analyst house's Data Center Summit in London on Tuesday.

"I am starting to see IT shops saying 'I've got a datacentre nearing capacity, it's suffering from power and cooling issues' or 'it's an old datacentre and I just don't have the capabilities or the capital to build a next-generation datacentre'," he said.

"We are seeing people use these kind of services as a capacity plan rather than to increase capabilities" — David Cappuccio, Gartner

Businesses are replacing on-premise systems performing non-business critical roles, such as test and development, with SaaS, in order to lessen the burden on internal infrastructure, he said.

"We are seeing people use these kind of services as a capacity plan rather than to increase capabilities."

Such a move can also be used as a stop-gap he said, to free up space and power in in-house datacentres until the IT department is in a position financially or strategically to expand the datacentre.

Cappuccio said companies he'd spoken to that had carried out analysis of their application portfolio found that only 15 to 25 percent of their applications are critical to the business. A common definition of business critical applications is, he said, those that will cost the business money or cause reputational damage when offline. As businesses replace these non-critical applications with cloud services the long-term effect could be a reduction in the size of internal datacentres.

"If long term I move these applications or non-critical services off elsewhere, then suddenly the size of the datacentre and the amount of equipment I need to support those critical ones shrinks dramatically.

"Our next-generation build might be 20 percent of what I thought I needed."

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