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1What IT Executives Say About SaaS

More than 95 percent of organizations surveyed expect to maintain or increase their investments SaaS.

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More than one-third of organizations have migration projects under way from on-premises to SaaS.

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Respondents cited ease and speed of deployment and cost-effectiveness as the top two reasons for adoption.

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Top ways organizations used SaaS? Either as replacements for on-premises applications or as net-new SaaS solutions. In previous surveys more respondents said SaaS was being used as an extension to an existing on-premises application.

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Nearly 70 percent of organizations have used SaaS for less than three years.

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Organizations are getting smarter on the deal side, too. More enterprises are renegotiating contracts early not only to satisfy demands for more functionality and an expanding user base, but to take advantage of better financial terms as downward pricing pressures continue.

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But the move to SaaS is not without problems. More than one-third of respondents indicated issues with their SaaS deployments including limited integration with existing systems, network instability, and longer-than-anticipated implementation cycles during deployment.

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Most say that no policies have been instituted to govern the evaluation and use of SaaS, suggesting a continued lack of a governance processes.

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The decisions made reguarding the move to SaaS is shifting more to the executive level of organizations and today stands as a joint decision between the business and IT.

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Currently, the vertical industries of communications (52 percent), utilities (51 percent), and banking and securities (49 percent) rank highest with respect to SaaS deployed.

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In 2012, those industries ranking highest with respect to their plans to use SaaS include federal government (33 percent), banking and securities (22 percent) and wholesale trade (20 percent).

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Beyond 2012, top industries considering SaaS are manufacturing and natural resources (37 percent), wholesale trade and retail (each 29 percent).

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Opportunities for vertical-specific SaaS solutions vary across and within the industries surveyed. Healthcare, insurance and retail industries currently have the highest level of SaaS-based vertical specific SaaS already deployed.

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Popular VSS solutions where SaaS will be considered going forward in these industries include medical coding/transcription and physician electronic medical health records in healthcare, core banking and related services in banking and securities, and case and records management in federal government.

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Gartner says that worldwide platform as a service (PaaS) revenue is on pace to reach $707 million in 2011, up from $512 million in 2010.

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The market is forecast experience consistent growth and Gartner expects PaaS revenue to total $1.8 billion in 2015.

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One trouble with the PaaS market is that it is fragmented with few providers offering a comprehensive and integrated solution. Customers that pursue a best-of-breed approach will sacrifice the benefits of integration.