Companies Taking Bad IT Habits into Cloud, Says Gartner

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 $8.8 billion.

The analysis firm advocates that organizations take four steps in evaluating whether to integrate SAAS into their IT infrastructure: 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 solutions.

A number of large IT firms see cloud computing as the way of the future, particularly within an enterprise context, where companies such as 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 about others."

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 menu."

Microsoft 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.