Adoption of
Software as a Service (SaaS) among small to
midsized firms is steadily on the rise, despite their concern
over security and reliability, according to a new report from
IDC.
 | | | | | I think adoption is far more
advanced than is being readily reported.
Jeff Kaplan
managing directorTHINKstrategies
Inc. |
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The report, which polled 614 small businesses and 418 medium-sized
businesses, found that SaaS has strong growth potential, with 5.1%
of small firms and 15.2% of medium-sized firms planning to move
forward with a SaaS solution within the next 12 months.
"SaaS is intuitively appealing as a method of software delivery
to SMBs, but they have not been adopting SaaS as quickly as
originally anticipated," said Merle Sandler, senior research
analyst for Framingham, Mass.-based IDC's SMB Markets program.
But while some experts agree that security concerns are valid,
they said they're not necessarily preventing small and medium-sized
businesses (SMBs) from adopting the on-demand model.
"I think adoption is far more advanced than is being readily
reported," said Jeff Kaplan, managing director of THINKstrategies
Inc., a Wellesley, Mass.-based SaaS consultancy.
"There are so many people that are adopting SaaS and learning
that security is better than in the past -- so that issue is a
valid question and it's important to ask, but it's no longer the
primary question," Kaplan said.
Since it first came on the scene, SaaS, a software distribution
model in which applications are hosted by a vendor or service
provider and made available to customers over a network, typically
the Internet, has been considered a pure SMB play. The idea of
getting high-end business software via the Internet -- pay as you
go via a credit card, seems a natural fit for the SMB.
Indeed, the ability to pay for capabilities as needed is the
main factor encouraging SMBs to use the remote software delivery
model, Sandler said. Adding new users without difficulty and easing
the workload of the IT staff are factors nearly as important for
medium-sized businesses.
What SMBs are most concerned about is the functionality, Kaplan
said. What they're finding is it's not just simpler and less
expensive, it also adds a whole layer of application opportunity
they couldn't get from legacy apps.
"A lot are having a revelation."
According to Stamford, Conn.-based research firm
Gartner Inc.,
the global SaaS market is expected to grow to $19.3 billion by
2011, tripling in size from the $6.3 billion it was in 2006. IDC
predicts SaaS will be worth $10.7 billion by 2009.
Kaplan said his polls found that interest in SaaS has jumped to
more than 40%.
"The fact is, it's more pervasive, especially at the high end,
but that's not to belittle what's happening at the low end."
Let us know what you think about the story; email:
Kate Evans-Correia, News
Director