SAAS applications are becoming a more substantial part of many companies' IT infrastructure, according to a new research note by Gartner, but a number of companies are taking their "bad practices" from on-premises software into the cloud with them. Top among those is "shelfware," or paying for unused software. Gartner also suggests that SaaS remains a relatively tiny percentage of total enterprise software deployments. Nonetheless, companies such as Microsoft are devoting more and more resources to the cloud, envisioning it as the way of the future.
Software-as-a-service applications will remain a focus of the enterprise
for some time to come, according to a new research note from analysis firm
Gartner. However, along with that adoption, a number of companies have started
engaging in the same "bad practices" with the cloud that marked their use of
on-premises software, particularly with regard to shelfware.
"Shelfware as a service is the concept of paying for a
software subscription that is not being accessed by the end user," David
Cearley, an analyst with Gartner, wrote in a June 14 statement. "This most
commonly occurs in large organizations, but it could happen to any company,
especially those that have downsized their workforce, or one that has
oversubscribed to trigger a volume discount."
While Gartner suggests that shelfware is becoming an issue
in SAAS adoption, the cloud model has nonetheless
inserted a welcome element of choice into the software market. It also gives
enterprises and SMBs the ability to integrate software quickly into their
organizations. "SAAS changes the role of IT from implementing its own
operations to inspecting a vendor's operations," Cearley wrote.
Despite the buzz surrounding SAAS,
however, Gartner found that actual adoption is still a relatively tiny
percentage of total IT deployments. "In 2009, within enterprise applications,
SAAS represented 3.4 percent of total enterprise spending, slightly up from
2008 at 2.8 percent," Cearley wrote in his statement. For 2010, Gartner
predicts the global enterprise applications software market will total some
The analysis firm advocates that organizations take four
steps in evaluating whether to integrate SAAS into their IT
Determine the value of a SAAS implementation,
create a SAAS policy and governance document, evaluate SAAS
vendors within the context of specific needs, and craft
an integration road map that shows how SAAS applications
will integrate with on-premises
A number of large IT firms see cloud computing as the way of
the future, particularly within an enterprise context, where companies such as
Salesforce.com and Microsoft have dedicated substantial resources to SAAS offerings. In a sign of the segment's increasing
importance, Microsoft filed a lawsuit against Salesforce May 18, alleging
violations of nine patents; while Microsoft positioned that action as a pure
intellectual-property issue, Salesforce CEO Marc Benioff suggested that it
could have a negative effect on SAAS vendors throughout the industry.
"I think it probably has more ramifications for other cloud
vendors than it, honestly, does for us because we're strong," Benioff told
analysts and reporters during a May 20 earnings call, according
to a transcript released by Seeking Alpha
. "And a lot of other cloud CEOs
have been contacting me, and my heart goes out to them and because I feel like
that's the real impact is that if you go through it, you can see where this is
going. And there's obviously a next step here, and it's not about us, it's
The patents contested by Microsoft cover specific areas such
as "Method and system for mapping between logical data and physical data,"
"Method and system for stacking tool bars in a computer display," and "System
and method for providing and displaying a Web page having an embedded
itself is attempting to embrace a more cloud-centric model for its businesses
with endeavors such as the recently released Office Web Apps for SkyDrive,
which lets users view and edit Word, PowerPoint, Excel and OneNote documents
online via the browser.
Companies ranging from Salesforce to Oracle have also
attempted to insert a more substantial social-networking aspect into their
enterprise offerings, introducing cloud-based collaboration tools that allow
workers to communicate over projects in real time.