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June 14, 2010

Gartner warns organisations to re-evaluate SaaS

Software-as-a-service represents 3.4% of total enterprise spending

By CBR Staff Writer

Software as a service (SaaS) will have a role in the future of IT, but not the dominant future that was first thought, according to IT research and advisory firm Gartner.

The research firm said that organisations will have to re-evaluate their software needs in light of the current promises delivered on by SaaS.

David Cearley, vice president and fellow at Gartner, said: "In 2009, within enterprise applications, SaaS represented 3.4% of total enterprise spending, slightly up from 2008 at 2.8%. Gartner predicts that the global enterprise applications software market will reach $8.8bn in 2010."

According to Gartner, spending for SaaS is mostly occurring in content, collaboration and communication and the customer relationship management markets, collectively accounting for 65% of the global enterprise applications software market in 2009.

However, Gartner said that even though SaaS does not solve all the challenges of software delivery, it can provide advantages based on the specific circumstances of a deployment as it is quicker to implement and configure for less-complex problems.

The firm said that of the current deployments, a total of 90% of SaaS deployments are not pay-per-use, but it has re-energised the software market and added choice. Mr Clearly said: "SaaS changes the role of IT from implementing its own operations to inspecting a vendor’s operations."

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Gartner recommends companies to evaluate and understand the trade-offs that SaaS presents as well as develop a SaaS policy and governance document to create internal and external SaaS governance model.

In addition, it also advised organisations to evaluate SaaS vendors for specific application needs as applicable and develop an integration road map on how SaaS applications will integrate with on-premises applications and other SaaS offerings deployed.

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