SaaS Research Study – CIO Insight

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CIO Insight recently released the results of its July 2007 Research Study on SaaS, SOA and web services. We typically think about SaaS adoption both from a breadth perspective – the number of organizations that have adopted at least one SaaS app – and depth – how many SaaS apps has the typical adopter deployed. The organizations with ‘deep’ adoption are the ones where we see management and control issues starting to emerge. While the report concludes that companies are ‘cautious’ in acceptance of SaaS, and that use of SaaS is ‘wide, not deep…yet’, taking a closer look at the numbers was instructive.

70% of survey respondents were IT executives from companies with 2006 revenues between $5 million and $1 billion; of those; of those approximately half were from companies between $5 and $100 million, so the survey had a clear bias towards SMBs/MSEs. The average respondent has 6 SaaS apps currently deployed – certainly nothing to sneeze at in this context. While the survey doesn’t have it, to get a better sense of adoption ‘depth’ it would be interesting to know what percentage of the total application portfolio for these respondents have ‘gone SaaS’. Our guess is that it would higher than most people expect. While SaaS pentration clearly hasn’t reached its potential, we get the sense from this (and other surveys and anecdotal evidence) that penetration within SaaS adopters is accelerating quicker than most would believe particularly in MSEs.

The other interesting note is that the survey was of IT executives who acknowledge that SaaS apps are frequently deployed at the departmental or business unit level. In many of these organizations, it’s likely that there’s additional adoption occurring below the radar screen of IT.

Read the full study here.

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