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Monday, May 12, 2008

Top Reasons Why SaaS Gains Momentum

More current business management application deployments are run in-house on traditional, installed licenses, but with new implementations, software-as-a-service (SaaS) is gaining ground, according to the latest market study by In-Stat.

Over the next 12 months, of the number of U.S. firms initially implementing a business management application such as CRM (customer relationship management), ERP (enterprise resource planning), etc, the percentage implementing a SaaS solution will approach the percentage of firms deploying traditional licenses in that market.

Along with gauging demand for business management applications (CRM, ERP, etc) delivered as a service, In-Stat also looked at demand for productivity applications (like Microsoft Office) delivered as a service.

While generally targeting smaller offices with often basic computing needs, office productivity applications delivered as a service are also beginning to gain some traction in larger firms.

Roughly 15 percent of 100-plus employee firms who currently use traditional, installed office productivity applications indicated in an In-Stat survey that they plan to implement or try a hosted model in the next 12 months.

The research covers the U.S. business market for software as a service. It provides a forecast of SaaS revenue in the U.S. business market through 2012. It also contains analysis of a recent survey of U.S. businesses regarding SaaS. Discussion of market drivers and barriers is also provided.

In-Stat's market study found the following:

- Accessibility to applications by remote or mobile workers is an important benefit to current SaaS users as well as those who are interested in SaaS.

- The main inhibitors to SaaS adoption are security concerns for larger firms and a lack of perceived TCO benefits for smaller firms.

- Four out of five hosted productivity application users would recommend using them to colleagues and plan to use them as much or more in the future.