SaaS Revisited

So what is it about software-as-a-service (SaaS)? Does it deliver the killer cost advantages as presented in a recent Hurwitz & Associates study or should organizations reevaluate their use of SaaS as Gartner suggests? The answer, like so many IT questions: It depends.

What it depends on is the organization’s size, its IT capabilities, the particular software category, the specific product under consideration, and more. The concept of SaaS certainly makes sense: software delivered on demand over the Internet as a service. The organization pays only for what it uses or adopts a pricing model that allows a predictable monthly or yearly cost. And there is no investment in IT hardware required; the SaaS vendor takes care of that. (In truth, the organization actually needs, at a minimum, enough IT in-house to ensure that it has a sufficiently fast and reliable Internet connection to the SaaS provider and interoperability with whatever other systems it may use.)

Hurwitz, which focused mainly on midsize organizations, found that the cost advantages of SaaS solutions are significant across all deployment sizes evaluated, ranging from 10 to 100 users. Gartner, despite its recent reservations about SaaS, expects it to likely penetrate every company at one level or another, and advises organizations to take a few precautions. (more…)