The Growing Importance of SaaS as an Application Deployment Platform
March 1, 2013
Grazed from CloudCow – Contributed. Author: Dick Csaplar, Senior Research Analyst, Aberdeen Group.
In January 2013, Aberdeen surveyed 123 organizations to learn how they use the Public Cloud as part of their IT infrastructure as well as the use of Software-as-a-Service (SaaS). This Blog will focus on Software-as-a-Service as a platform for enterprise applications and the growing importance it plays as an application deployment method. Companies now have an alternative to purchasing a software license when they decide to use a commercially available application. Aberdeen research shows wide use of Cloud-based SaaS applications in many different parts of today’s enterprises. The full report can be found here.
Cloud SaaS Offerings
Most software vendors now offer a SaaS deployment of their application. Users are likely familiar with SalesForce.com, Google Apps, and Microsoft Office 365 as the most widely used of these applications, however there are now SaaS offerings for almost every aspect of business management. The technology can be used for departmental apps (such as customer relationship management (CRM), product lifecycle management (PLM), and business intelligence (BI) or by function (email, database, and ecommerce)…
As a result of this availability, using the SaaS form of an application has grown increasingly popular. In Figure 1, survey respondents reported the types of SaaS applications they used.
The usage rates varied dramatically, with the CRM arena dominating the field, not surprising as this is the home of the popular SalesForce.com (Microsoft’s CRM application is also in this category). The 52% utilization rate includes CRM used to manage sales and service functions such as help desk and customer repair.
Email is the second most popular SaaS deployment with Exchange mail accounting for about 38% of the total. Even with Finance and Accounting, the source of some of the most private data a company manages, 17% of survey respondents reported trusting their data in a SaaS deployment.
Number of SaaS Applications Used
Eighty percent (80%) of respondents reported currently using a SaaS application. SaaS usage was about even across companies of all sizes as shown in Table 1. Mid-sized organizations were the lowest users of SaaS, but only about 5% off the average. Not surprisingly, large enterprises have the highest rate of SaaS usage as they deploy more and support a wider variety of software applications as a whole. However, even they reported only about a 7% higher SaaS usage rate than average.
All organizations reported spending less for application deployment and support since adopting SaaS as an application usage option. Overall, companies reported spending about 5% less than before using SaaS, a fairly minor amount that could also be attributed to other software influences including virtualization, greater efficiencies, and application standardization. While the reported decrease in spending is small, Aberdeen expects to see this increase as SaaS is more widely adopted.
The average number of SaaS applications used by all respondents who are using this form of application was 3.1 applications. A majority are currently using one or two SaaS applications (50%), but more interestingly a significant number are using more than four (32%). Several organizations reported using 10 or more.
Survey respondents reported the most common SaaS applications are (in order of widest use and type of application) SalesForce.com (CRM), Google Apps (productivity), Microsoft Office 365 (productivity), Amazon SimpleDB (database), NetSuite (ERP — Enterprise Resource Planning), SugarCRM, Microsoft Dynamics CRM, and Sage (CRM, human resources, project management). Note the wide number of types of SaaS applications reported.
Summary: The Growing Importance of SaaS
SaaS deployments of business applications are the most popular form of the Public Cloud and offerings run the entire length and width of business management. Aberdeen expects to see the rate (number of implementations) and the breadth (different types) of SaaS usage increase in the coming years. Aberdeen will continue to survey and report on the progress.
Most software providers now offer a SaaS form of application license. They recognize that not all companies want to have to purchase a software license, manage the supporting computing infrastructure, and deal with the continual servicing and software upgrades. As more vendors recognize the benefits of SaaS to their users, SaaS may even become the dominant form of application deployment in the near future.
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