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Software as a Service Survey

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In an April SaaS survey conducted by Burton Group and Ziff Davis Enterprise Research, 67 percent of the 252 CIOs whose companies use some form of SaaS have been doing so for two or more years.

1. Software as a Service Survey
2. Length of Time Using
3. Information Used to Evaluate
4. Viewpoints and Approaches
5. Time
6. Risks and Negatives
7. Enterprise Applications
8. Most Likely Application
9. Fees
10. Staff Reductions

Trial Version Tips (from InformationWeek Analytics)

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InformationWeek published a great special report on SaaS and how to take it beyond CRM. We will talk more about this report in later posts. I do wanted to highlight a sidebar the report included on doing trials on SaaS products. It listed the following great tips:

• Limit the field
• Take the test drive personally
• Request a 30-day trial
• Sign up multiple team members
• Spend time setting up the trial account
• Get real
• Match up your workflow
• Ask for help
• Turn it all over to an end user

Survey: why companies still shun SaaS

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Computerworld has an interesting article titled Survey attempts to answer why companies still shun SaaS. (I believe it’s originally from CIO.com.)

A late 2007 survey of North American and European software IT decision-makers found that just 16 percent of respondents said they were already using or currently piloting SaaS applications. Conversely, more than 80 percent were still on the sidelines-curious, for sure, but not yet completely sold or running SaaS apps right now. (Forty-six percent said they were interested in SaaS or planning to pilot; 37 percent said they were “not at all interested.”)

According to a Forrester Research survey, these are the top eight reasons why companies say “No Thanks” to SaaS.

66% Integration issues
61% Total cost of ownership concerns
55% Lack of customization
50% Security concerns
42% “We can’t find the specific application we need”
39% Complicated pricing models
39% Application performance
34% “We’re locked in with our current vendor”
(Note: Multiple responses accepted)

Enterprise Software Customer Survey 2008

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McKinsey & Company and Sand Hill Group recently released a survey called “Enterprise Software Customer Survey 2008.” This report focuses mainly on the SaaS market. The survey received responses from over 850 enterprises and had some very interesting observations.

1. 62% of the respondents believe that innovation is on the upswing
2. 31% of the respondents believe that SaaS will be the most important trend impacting their business
3. 19% of software budget is spent on SaaS/OnDemand solutions (expectation is 21% by 2009)
4. SMBs (< 1000 employees) continue to be the biggest adopter for SaaS; however, large enterprises are spending a significant portion (11%) of their software budget on SaaS
5. 74% of the enterprise customers are favorably disposed to adopting SaaS
6. SMBs are more likely to acquire SaaS products from non-traditional mega-players such as Microsoft and IBM
7. Ease and speed of deployment and integration still ranks #1 on the SaaS criteria
8. Large enterprises are more likely to have budget control at the BU level than SMBs

However, I do have a few questions that the survey didn’t answer/clarify:

• A comment on page 9 said that “large vendors such as IBM, Oracle, SAP and Microsoft do best in large enterprises, while SaaS ‘incumbents’ such as Salesforce, NetSuite and RightNow are more in favor with small business.” As we all know, SAP and Microsoft’s SaaS strategies are strictly focused on SMBs and the mid-market. For example, SAP’s Business ByDesign is focused on the SMB market; and Microsoft’s SaaS strategy is all about the long tail. So is Microsoft and SAP missing the boat by not focusing their SaaS strategy on the enterprise customers?
• The survey doesn’t really breakdown the respondents by company size. However, some of the results were broken down that way. It would have been more useful if we know the break down by company size.
• It unfortunately included managed hosting as a SaaS model, which I can’t really agree with. Of the 74% of respondents that are interested in SaaS, 32% are more interested in managed hosting. So does that mean only 42% are interested in SaaS (if managed hosting is not considered SaaS)?
• It would also be interesting if they broke down the respondents by type, e.g., enterprise customer or ISV. After going over the survey, there seems to be a mix set of responses.

The survey also listed out the 3 “SaaS platform options” on page 6. It listed them as

• Delivery platforms
• Development platforms
• Application-led platforms

This breakdown is more focused on enterprises who are looking to build a SaaS offering rather than use a SaaS application.

You can download the survey or view it below.