Recent press: Media outlets take on the ROI equation

IT TOPICS:Software

As media coverage of SaaS has ramped up, outlets have begun to poke around issues concerning security and ROI. Clearly, SaaS is no panacea, but experts all seem to come to the conclusion that this is a much more convenient way to adopt new software.

Purchasing.com also has a nice overview of Factors to consider when moving to on demand software. The peace quotes in number of Companies who had success with the SaaS mall and echo the refrain that SaaS is successful because the business users love it. One quote from an executive at Pep Boys should send chills down an IT manager’s spine: “The less IT involvement there is, the less grief there is. The less grief there is, the faster I get to my ROI…[With on-demand] I don't have to go through the internal bureaucracy in the IT department to figure out what size hardware they need and how to fit this in.”
There’s a good article in IT Week about the costs of SaaS verses conventional software. The story sites recent research by Forrester and Quocirca that concludes that SaaS is no cheaper then packaged software in the long term. However, the business benefits are still going to drive SaaS growth. "Hosted software is expanding beyond a cost story and becoming a revenue-generation story for firms," says a Business Objects executive quoted in the piece. “Experts agreed these advantages could cause hosted software to overtake on-premise applications as the dominant software delivery model within the next 15 years,” the article concludes.
DestinationCRM.com takes on the cost/benefit equation in a piece that tries to assign some real cost estimates to the on-premise vs. hosted equation. Everyone’s needs are different, of course, but this article will point out some factors to consider. What’s amazing is the cost of consulting services for on-premise installation. On user said those fees made up 48% of year-one costs.
SaaScon speaker Phil Wainewright titles a post on his ZDNet blog “It's an on-demand world” And points out that SaaS vendors are more effective at speaking to business constituencies than traditional software vendors. That’s because their audience his business users, whereas Packaged software vendors have effectively spoken to the techies. This is an inherent strength of SaaS, Wainewright says. Good point.
Purchasing.com quotes a recent AMR Research report about the procurement and sourcing market: “AMR says the hosted/subscription market grew 125% in 2005 compared with 44% in 2004. ‘Though the total market share is only 12% compared to application license market share of 32%, this does represent a major shift in buying patterns,”’ the report says.