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More than 95% of Organizations to maintain or grow SaaS use

More than 95 percent of organizations expect to maintain or grow their use of software as a service (SaaS), according to a survey by Gartner, Inc. Survey respondents cited significant integration requirements and a change in sourcing strategy as the top two reasons for adoption followed by high total cost of ownership (TCO).

However, Gartner found that most companies still do not have policies governing the evaluation and use of SaaS with only 39 percent of respondents indicating that such a policy or process exists, up just 1 percent from 38 percent in 2008.

The survey involved 270 IT and business management professionals from a variety of industries in North America, Europe and Asia/Pacific who were personally involved in the implementation support, implementation, planning and/or budget decisions related to the purchase of enterprise application software.

"SaaS applications clearly are no longer seen as a new deployment model by our survey base, with almost half of those surveyed affirming use of SaaS applications in their business for more than three years," said Sharon Mertz, research director at Gartner. "The varying levels of maturity within the user base suggest growing opportunities for service providers along the adoption curve, as organizations seek assistance with initiatives ranging from process redesign to implementation to integration services."

Mertz said the scope of functionality of SaaS applications has broadened significantly in recent years. In terms of popularity for SaaS usage, the survey showed that e-mail, financial management (accounting), sales force automation and customer service, and expense management are the most popular in terms of current use, with more than 30 percent of the survey base using these types of applications.

In terms of expected investment levels in SaaS solutions over the next two years, survey respondents gave generally encouraging responses for software and service providers, with on average 53 percent of organizations expecting to increase investment levels slightly and 19 percent significantly. However, not all buyers intend to increase usage, with almost one-quarter of all respondents expecting investment levels to remain about the same, and 4 percent looking at a slight decrease in investment levels.