Nine out of 10 companies plan to grow their use of software-as-a-service (SaaS) this year, according to a survey by Gartner, Inc.
More than one third of respondents (37%) plan to replace on-premises software with SaaS to drive down total cost of ownership (TCO), Gartner found.
Those surveyed cited cost-effectiveness and ease of deployment as primary reasons for adoption. Other major drivers included replacing on-premises solutions that had not met performance expectation or changes in sourcing strategy. Most respondents were either currently using SaaS, or planned to use it within the next 12 months.
European firms trailed North American companies when it came to plans to increase investments in SaaS or subscription model products. (See table.) The U.S. has been an early adopter of SaaS, with more than 20 percent of respondents indicating use for five years or longer and 60 percent having adopted it in the last three years.
There is a firm belief in the market that the current global recession, which will force firms to cut discretionary spending in 2009 and 2010, would see budgets redirected from enhancing on-premises solutions towards SaaS solutions.
The full report, titled “User Survey Analysis: Software as a Service, Enterprise Application Markets, Worldwide, 2008,” is available at www.gartner.com.