What Drives Companies To Deploy SaaS?

by CXOtoday News Desk    Nov 25, 2014


Indian companies are increasingly deploying Software as a Service (SaaS) to ensure agile and efficient services to their clients. Just like varied benefits, the reasons for deployment vary according to the companies’ needs.

Gartner says that global buyers of cloud applications cite cost, innovation and agility as reasons for adoption.

As per the study conducted between May-June 2014 in the U.S., Brazil, Mexico, the U.K., Germany, France, China, India, South Korea and Australia, 44 pc of survey respondents said that overall cost reduction continues to dominate as the main reason for investment.

“The most commonly cited reasons the survey found for deploying SaaS were for development and testing production/mission-critical workloads,” said Joanne Correia, research vice president at Gartner.

“We’ve seen a real transition from use cases in previous surveys where early SaaS adoption focused on smaller pilot projects. Today, the projects are mission-critical and production grade. This is an affirmation that more businesses are comfortable with cloud deployments beyond the front office running sales force automation (SFA) and email,” said Correia.

Regardless of the reason of implementing cloud, Gartner advises that public cloud is not always the most appropriate model for all use cases within companies. The decision to deploy SaaS-based applications within an enterprise depends on the business-criticality of the solution, as well as the organization’s geography, business agility, usage scenario and IT architecture.

Therefore, few organizations will completely migrate to SaaS and will live with a mix of SaaS and traditional on-premises application deployment models, with a focus on integration and migration between different deployment models.

What it means for executives

“Data loss, data breaches, unsecure application programming interfaces (APIs) and shared technology in a multitenant environment are just a few of the concerns expressed by respondents tackling the option of using public cloud,” said Laurie Wurster, research director at Gartner. “In addition, recent concerns of government snooping in the name of anti-terrorism and general privacy issues contribute to the lack of public cloud adoption.”

However, when the data is organized by role, the cloud adoption survey indicates that “cost reduction” rated highest for the more junior IT roles (IT staff and IT managers).

Senior business executives (excluding CIOs) also rated “cost reduction” as a key benefit, but not at the same rate as the IT staff. The CIO and IT director roles all rated “cloud is a modern approach,” “innovation” and “operational agility” as top drivers. The senior IT leaders also rated “business advantage” significantly higher than junior IT roles.

The conclusion is that CIOs are focused on using the cloud to establish a modern, innovative IT environment with operational agility and business advantage as key outcomes whereas business leaders (non-IT) still see the cloud as a means to save costs and may not yet have full appreciation for the business benefits or strategic opportunity of using cloud services.

Private cloud leading the trend?

The trend indicated by respondents’ cloud adoption behavior for software deployment suggests the majority of data centers are moving to private cloud deployment for implementation of new software. The traditional deployment model for on-premises software is expected to significantly shrink from 34 percent today to 18 percent by 2017. Legacy software will remain on-premises in the traditional model until end of life unless updates and upgrades allow for private cloud deployment models, says Gartner.