A survey recently published by leading UK-based software-as-a-service (SaaS) provider BIW Technologies (BIW) suggests that the worsening economic downturn could help the SaaS sector double its annual revenues in the UK to £2.5 billion over the next three years to 2011.
SaaS is one of the most exciting and fastest-growing parts of the software sector. Analyst firm Forrester Research said that adoption of SaaS increased by a third last year in large companies, while specialist investment bank Triple Tree recently said that SaaS "has grown beyond a mega-trend to cause major disruption to the status quo in the software industry".
The survey by BIW Technologies covered over 300 senior IT directors and managers at a range of companies spanning sectors from financial services to property and construction, travel, hotels, utilities and insurance.
Over 65% of respondents thought that the current economic difficulties would help accelerate the pace of adoption of SaaS, identifying three main reasons: it is quicker to implement, less costly overall and requires less up-front investment.
In tougher economic times, companies want to shed the extra costs and risks inherent in large, long-term IT implementation projects. Software delivered as a service is rented by users rather than owned, and can therefore be switched on and off at short notice. This reduces the upfront payment, smoothes costs, and reduces implementation risk.
These advantages mean that SaaS is being used by companies in a growing number of areas such as customer relationship management (CRM), document collaboration, web conferencing, enterprise resource planning (ERP) and human relations functions.
Almost 70% of respondents thought the proportion of their overall software needs that would be provided by SaaS would at least double over the next five years, from around 15% currently to over 30%. Also, some 40% of respondents now said that they were 'very aware' of SaaS and that their awareness had increased significantly over the past two years.
In terms of the main benefits of using SaaS, which is prompting its wider adoption, some 70% of respondents cited four main advantages:
Helps to reduce in-house IT overheads;
Upgrades to new future versions are easier and carry less risk;
SaaS can be deployed more easily throughout the supply chain;
It is quick to deploy and more able to meet changing needs.
Another benefit cited was use of SaaS in compliance. With the applications and data being securely hosted by a specialist third-party, organisations are effectively transferring a key business risk, while still enabling their auditors to have access to complete audit trails, showing who did what and when.
Colin Smith, CEO BIW Technologies, commented: "I think it's clear from this comprehensive survey that more and more companies are recognising the benefits of SaaS to enhance their business and help cut costs in this challenging economic environment. There is also an increasing acceptance that using SaaS can help companies reduce IT-related risks, manage costs and respond more nimbly to changing software needs. In addition, it can materially reduce a business's carbon footprint."