Sixty Percent Of Companies Using Applications In The Cloud

SaaS adoption is up 13 points over last year, to 60 percent, despite lingering concerns about features and functionality, according to a survey. More than one-quarter of survey respondents say the applications they have delivered as services are mission critical, down from 34 percent. Meanwhile, start-ups and niche SaaS providers are going up against established vendors like Microsoft, Google and Salesforce.com, giving smaller businesses opportunities to take advantage of the burgeoning technology.

Other findings:

-- SaaS use among companies surveyed jumped to 60 percent from 47 percent last year.

-- Speed to implement, capex savings and opex savings are the biggest drivers behind the move to a SaaS model.

-- Top reasons 40 percent of companies don't use SaaS: lack of business requirement, concerns over security and concerns over data ownership.

-- SaaS satisfaction levels dipped 11 points, to 74 percent; still, only 14 percent say their app services don't meet expectations.

-- Twenty-six percent of respondents rate their SaaS-delivered apps "mission-critical," down from 34 percent a year ago; they rate 61 percent "important," vs. 51 percent last year.

-- CRM (44 percent), Web presence (38 percent) and email (35 percent) are the most common SaaS apps, followed closely by HR/recruiting (33 percent) and sales (32 percent).

-- Microsoft (34 percent, up 8 points), Salesforce.com (30 percent, down 11 points) and Google (26 percent, down 2 points) still garner the bulk of the market, but ADP (18 percent, up 15 points), IBM (16 percent, up 14 points) and EMC (15 percent, up 7 points) have gained ground, and smaller companies abound. Oracle dropped 11 points, to 15 percent.

-- The split between companies using customized SaaS apps and those using standard SaaS apps: 50/50.

Comment from Lorna Garey, content director of InformationWeek Analytics: It's getting harder for SaaS vendors to maintain quality levels, because they have to provide both standard and custom services for different companies. Most IT pros tell us they're happy to outsource apps so they have time to focus on content development and other projects, but they still work closely with the vendors to manage service contracts and processes--they don't just relinquish control for reliability and security, for instance.

About the survey: InformationWeek Analytics's report, SaaS 2011, explores the state of software as a service, a technology being adopted at unprecedented rates. The 275 respondents to this exclusive survey are business technology decision-makers involved in their companies' enterprise applications strategies. Report author, Michael Biddick, is president and CTO of Fusion PPT.

Contact: http://www.informationweek.com/