Enterprise Not in Love with Software as a Service, Gartner Finds

 
 
By Nicholas Kolakowski  |  Posted 2009-07-09 Email Print this article Print
 
 
 
 
 
 
 

A new survey by research firm Gartner found that businesses were relatively lukewarm to software as a service, suggesting that, despite the hype, these applications need more work in order to gain full acceptance within the enterprise. Those who declined to use SAAS cited high costs, difficulty with integration and failure to meet technical requirements as primary reasons.

A new survey by research firm Gartner shows that not everyone in the enterprise is overwhelmed with love for software as a service, even as it becomes an increasingly mainstream aspect of business life. According to the attendant survey, much of the dissatisfaction stems from less-than-ideal interactions with SAAS.

The survey found that 58 percent of the 333 organizations in the United States and the U.K. will maintain their current level of SAAS applications, while another 32 percent plan to expand their offerings. However, 10 percent of respondents also indicated that they planned to either discontinue (5 percent) or scale down (5 percent) their levels of SAAS.

The organizations rated their overall satisfaction with SAAS as 4.74 on a 7-point scale, with their judgments based on 16 metrics including functionality for business users, service reliability, support compliance and risk management. Organizations based in the United States rated their satisfaction as slightly higher, at 4.94, than U.K. organizations, who rated SAAS at 4.34.

"Our research findings did not exactly provide a ringing endorsement of SAAS; in fact I would go as far as to say that satisfaction levels among SAAS users are little more than lukewarm," Ben Pring, research vice president at Gartner, said in a statement. "Although macroeconomic factors would seem to favor SAAS providers, almost two-thirds of respondents said that they planned only to maintain their current levels of SAAS in the next two years."

Those surveyed who declined to use SAAS cited the high cost of service, difficulty with integration and failure of the solution to meet technical requirements as their reasons. When pondering whether to deploy SAAS, respondents suggested that meeting technical requirements, security and privacy, and ease of integration and functionality were the top three factors they would need to consider.

"Underwhelming customer satisfaction scores, hesitation over the true cost of SAAS solutions and concerns regarding how successfully SAAS applications can be integrated with other applications all point to issues that will need addressing and resolving," Twiggy Lo, an analyst at Gartner, said in a statement.

At least a few software vendors for the enterprise feel that a few more elements are needed before SAAS can truly take hold within a business context.

"There are two overlapping issues at play: billing and provisioning," Soeren von Varchmin, vice president of SAAS and Service Providers International for Parallels, a virtualization and automation software designer, said in a statement to eWEEK. "In order to grow their customer base, these companies must automate the manual processes needed to provision and bill for new services."

"This is because the added complexity of supporting more users will increase the chances of human error and significantly impact customer experience," he added. "End users must have 'self service' SAAS, meaning they are free to administer their own services instead of having to contact the vendor to purchase or remove applications."

The report from Gartner draws similar conclusions, stating that SAAS vendors looking for new customers, or client retention, "must focus on truly delivering lower TCO, facilitating easier deployments that negate the need for expensive consulting support and providing more robust integration strategies." In other words, SAAS applications that focus on being simple and intuitive for users.

 
 
 
 
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
 
 
 
 
 
 
 

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