For all the cost-saving appeal of cloud applications — more commonly referred to as SaaS (software as a service) — enterprises are still trying to get their heads around the benefits and risks of SaaS and which parts of the company need it the most.
There's no question that SaaS is the fastest growing public cloud category. To gather data on SaaS usage, Forrester surveyed 1,000 IT decision-makers from North American and European enterprise companies with 1,000 or more employees.
In a report by Forrester analyst Liz Herbert entitled, "The SaaS Market Hits Mainstream: Adoption Highlights 2011," the research firm culls the survey data to highlight how companies are using SaaS, what benefits they hope to get out of it and which parts of an organization are driving SaaS purchases. Hint: It's not necessarily IT.
Forrester's survey research indicates that SaaS is used in three main areas: business processes (CRM and human resources), collaboration such as messaging, e-mail, web conferencing (Google Apps and Office 365), and industry-specific processes such as claims management for the insurance industry and sales reporting for retail.
The main benefit that firms hope to gain when implementing SaaS is, not surprisingly, lower costs, both upfront and long-term. Other SaaS benefits include faster delivery of application features, improved support for remote users and better overall user satisfaction via familiar Web user interfaces from the likes of Salesforce.com.
Regarding SaaS purchasing decisions, Forrester survey data confirms that partners and business groups, such as sales VPs buying Salesforce.com or HR departments buying SuccessFactors, are the primary drivers of SaaS adoption. On the other hand, IT developers handling purchases are in charge of procuring cloud platforms (PaaS) and cloud services for collaboration, security and storage.
"Much of SaaS purchasing comes from groups outside of the traditional IT sourcing model," writes report author Herbert. "This has significant implications because it means that organizational units are sourcing their own technology in a decentralized way."
This leaves it to "sourcing executives" — members of the IT group responsible for defining the business' tech purchasing strategy and negotiating with vendors — to navigate the needs of business units and make SaaS purchases that have long-term benefits and solid TCO.
But as sourcing executives head to the negotiating table, they need to be wary of cloud hype and think long term. Here are three ways to make sure the benefits of SaaS meet your company's business and technology needs.
