Gartner offers conflicting opinions on the success and failure of Software-as-a-Service

News by Dan Raywood

Organisations need to re-think the need for Software-as-a-Service (SaaS) as it will not have the dominant future that was originally imagined.

Organisations need to re-think the need for Software-as-a-Service (SaaS) as it will not have the dominant future that was originally imagined.

According to David Cearley, vice president and fellow at Gartner, organisations should carefully assess their software needs in light of the current promises delivered on by SaaS.

He claimed that while SaaS has re-energised the software market and added choice, it ‘may not have delivered on its early grand promises'. He said: “Of the current SaaS deployments we estimate that a total of 90 per cent of SaaS deployments are not pay-per-use. SaaS does not solve all the challenges of software delivery, but can provide advantages based on the specific circumstances of a deployment, as it is quicker to implement and configure for less-complex problems.

“SaaS changes the role of IT from implementing its own operations to inspecting a vendor's operations.”

Cearley said that many of the bad practices that occurred in the on-premises world are now moving their way into SaaS, and the biggest example is 'shelfware'.

He said: “Shelfware as a service is the concept of paying for a software subscription that is not being accessed by an end-user. This most commonly occurs in large organisations, but it could happen to any company, especially those that have downsized their workforce, or one that has oversubscribed to trigger a volume discount.”

Analysts recently debated SaaS at Gartner's Service-Oriented Architecture (SOA), Application Development and Integration summit 2010 in London, and found that in 2009, within enterprise applications, SaaS represented 3.4 per cent of total enterprise spending, slightly up from 2008 at 2.8 per cent. It predicts that the global enterprise applications software market will reach $8.8 billion in 2010.

Gartner claimed that SaaS will likely penetrate every company at one level or another, and recommended that organisations consider four steps when evaluating SaaS. The first is to determine its value, as companies need to evaluate and understand the trade-offs that SaaS presents because while it limits infrastructure overheads and management and lowers short- to medium-term total cost of ownership, third-party application tools are limited and SaaS applications cannot be counted as assets on a balance sheet.

The second is to develop governance and develop a SaaS policy and governance document; the third to evaluate SaaS vendors for specific application needs as applicable; and the fourth to determine how SaaS applications will integrate with on-premises applications and other deployed SaaS solutions.


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