Analyst: Firms need to ‘re-evaluate’ SaaS

Analyst: Firms need to ‘re-evaluate’ SaaS

Bad practices that occurred in the on-premises world are now moving into SaaS

With Software-as-a-Service (SaaS) not living up to its current promises, companies should “re-evaluate” the technology and carefully assess their software needs, according to an analyst firm.

Gartner said SaaS will have a role in the future of IT, but not in the dominant future that was first thought.

“In 2009, SaaS represented 3.4 percent of total spending on enterprise applications, up from 2008 at 2.8 percent,” Gartner vice-president and fellow, David Cearley, said.

Gartner predicts the global enterprise applications software market will reach $US8.8 billion in 2010.

SaaS spending is in content, collaboration and communication and CRM markets. Collectively, they represented 65 per cent of the global enterprise applications software market in 2009.

Cearley said the bad practices that occurred in the on-premises world are now moving their way into SaaS. The biggest problem is “shelfware-as-a-service,” which is the concept of paying for a software subscription that is not being accessed by an end user.

“This most commonly occurs in large organisations, but it could happen to any company, especially those that have downsized their workforce, or one that has oversubscribed to trigger a volume discount,” he said.

But it’s not all doom and gloom, Cearley said. While SaaS may not have delivered on its early grand promises (90 per cent of the SaaS deployments are not pay-per-use), the technology has “re-energised the software market and added choice".

Cearley said the technology is good at delivering quicker deployments and can be configured for less complex problems.

“SaaS changes the role of IT from implementing its own operations to inspecting a vendor’s operations,” he said.

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Tags GartnerSoftware-as-a-Service (SaaS)


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