SaaS Momentum Gaining, Increased Investment Expected, Gartner Says

Adoption of software as a service (SaaS) has grown dramatically among users of enterprise software solutions, with 71 percent of organizations migrating to SaaS in the last three years, according to Gartner Inc.

Investments in SaaS  are expected to continue unabated, increasing across all regions. Worldwide, 77 percent of respondents expected to increase spending on SaaS, while 17 percent plan to keep spending the same. In the U.S., 73 percent of respondents intend to increase spending on SaaS.

“Seeing such high intent to increase spending isn’t a huge surprise as the adoption of the on-demand deployment model has grown for more than a decade, but its popularity has increased significantly within the past five years,” said Eschinger. “Initial concerns about security, response time and service availability have diminished for many organizations as SaaS business and computing models have matured and adoption has become more widespread.”

In addition, the research firm, found a  shift in SaaS adoption from primarily extensions to existing applications to net new deployments or replacements of existing on-premises applications. In the United States and other mature markets, replacement of legacy on-premises systems is the primary driver,  said Charles Eschinger, research vice president at Gartner.

Respondents picked customer relationship management (CRM) and enterprise content management (ECM) as the applications most often being newly deployed. Supply chain management (SCM), Web conferencing, teaming platforms and social were the applications picked most as replacements for on-premises solutions.

That said, Eschinger noted  few organizations will completely migrate to SaaS. “These organizations will live with a mix of SaaS and traditional on-premises application deployment models with a focus on integration and migration between different deployment models,” he said.  

The data come from a June and July survey of 556 organizations across 10 countries and within four regions (North and South America, Europe and Asia/Pacific).

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