SaaS Adoption Continues to Grow: Gartner

Implementing net new solutions or replacing existing solutions is the current primary driver for using SaaS.

Interest in the software as a service, or SaaS, deployment model remains strong and continues to expand with late adopters, according to a Gartner survey of 556 organizations across 10 countries.

Results showed 71 percent of organizations have been using SaaS for less than three years and adoption of SaaS has grown dramatically among users of enterprise software solutions, but it varies widely within markets: Brazil had the largest number of new users, with 27 percent of respondents using SaaS for less than one year. Implementing net new solutions or replacing existing solutions is the primary driver for using SaaS, according to the survey.

"Although approximately half of respondents in the Asia-Pacific region indicated the primary adoption driver of SaaS was net new deployments, the U.S. and European respondents indicated their strongest driver was to replace existing on-premises applications," said Charles Eschinger, Gartner research vice president. "It's not surprising that SaaS is being deployed as net new deployments in Asia-Pacific since many of the users are relatively new businesses with few legacy systems. Markets, such as the U.S. and EMEA [Europe, the Middle East and Africa] are mature with existing enterprise systems and are beginning to use SaaS as a replacement for legacy applications."

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

"The decision to deploy SaaS-based applications within an enterprise is dependent on the business criticality of the solution, as well as geography, business agility, usage scenario and IT architecture," Eschinger said. "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."

Worldwide, investments in SaaS are expected to increase across all four regions assessed in the survey. Seventy-seven percent of respondents expected to increase spending on SaaS, while 17 percent said they plan to keep spending the same. Nearly three-quarters (73 percent) of U.S. respondents and 71 percent of European respondents said they intend to increase spending on SaaS, and more than 80 percent of respondents in Brazil and the Asia-Pacific region indicated more spending on SaaS applications in the next two years.

"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," Eschinger said. "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."