Nearly all organisations expect to invest in software as a service, according to a Gartner survey.
And the analyst found over a third of organisations had already begun migrating on-premise applications to software as a service (SaaS).
In the survey of 525 organisations, Gartner found 95% expect to invest significantly in software as a service (SaaS). The communications (52%), utilities (51%) and banking and securities (49%) industries rank highest with SaaS deployed across the horizontal and vertical-specific categories sampled.
"Respondents cited ease and speed of deployment and cost-effectiveness as the top two reasons for adoption," said Sharon Mertz, research director at Gartner.
More organisations are renegotiating contracts early to satisfy demands for more functionality and an expanding user base. They are also exploiting improved financial terms of SaaS, as downward pricing pressures continue in the wake of economic turbulence and increasing vendor competition.
However, Mertz warned: "Most respondents still indicate that no policies have been instituted to govern the evaluation and use of SaaS, suggesting that little progress has been made since the previous survey in developing governance processes. The importance of governance mechanisms will continue to increase as SaaS becomes a larger element of a company's overall sourcing strategy."