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SaaS a Reality with 95 Percent Participating

According to a new survey, more than 95 percent of IT organizations plan to expand or maintain their investments in software-as-a-service (SaaS), while a third have migrations to SaaS services underway. The survey, which was conducted in June and July by analyst firm Gartner, polled some 525 organizations across 12 industries in nine countries. Cloud […]

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Stuart J. Johnston

Oct 4, 2011

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According to a new survey, more than 95 percent of IT organizations plan to expand or maintain their investments in software-as-a-service (SaaS), while a third have migrations to SaaS services underway.

The survey, which was conducted in June and July by analyst firm Gartner, polled some 525 organizations across 12 industries in nine countries.

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Among the reasons for adopting SaaS are to replace on-premise applications or to deploy new SaaS solutions, the survey found.

“This represents a shift from previous Gartner surveys where more respondents indicated SaaS was being used as an extension to an existing on-premises application,” Sharon Mertz, research director at Gartner, said in a statement.

However, the survey also found that most respondents have made “little progress” since Gartner’s last survey with developing processes to govern evaluation and use of SaaS.

“The importance of governance mechanisms will continue to increase as SaaS becomes a larger element of a company’s overall sourcing strategy,” Mertz added.

One important trend illustrated by comparing the latest survey against similar ones conducted in 2008 and 2010 shows more business executives getting involved in the SaaS decision-making process, indicating that the process is becoming more of a joint decision between the business and IT.

Among the survey’s other findings are that many industries that have not pursued SaaS previously are beginning to do so.

“Currently, communications (52 percent), utilities (51 percent), and banking and securities (49 percent) industries rank highest with respect to SaaS deployed across the horizontal and vertical-specific categories sampled,” the report said.

Going forward is a slightly different story.

“In 2012, those industries ranking highest with respect to their plans to use SaaS include federal government (33 percent), banking and securities (22 percent) and wholesale trade (20 percent). Beyond 2012, top industries considering SaaS are manufacturing and natural resources (37 percent), wholesale trade and retail (each 29 percent),” the report added.

Combined with organizations’ plans for next year, government still rises to the top, however, with 60 percent saying they are considering SaaS deployments in 2012 and beyond, followed by manufacturing and natural resources with 50 percent.

The report is entitled, “User Survey Analysis: Software as a Service, Enterprise Application and Vertical Software Markets, Worldwide, 2011.”

Stuart J. Johnston is a contributing editor at InternetNews.com, the news service of Internet.com, the network for technology professionals. Follow him on Twitter @stuartj1000.