Thursday, May 22, 2008

SaaS: Aggressive Mid-Market Adoption

A recent Saugatuck Research worldwide survey of enterprise executives finds continued, strong growth in the adoption and deployment of software-as-a-service (SaaS).

According to the latest data, mid-sized firms are the most aggressive, and most satisfied, SaaS users.

Overall, the research indicates that nearly 40 percent of companies across all size categories will have adopted at least one SaaS application by year-end 2008.

Saugatuck believes that the number of firms that are likely to completely avoid SaaS is likely to drop to less than 5 percent within 3 years.

By 2012, 70 percent or more of businesses with greater than 100 employees (worldwide) will have deployed at least one SaaS application.

Interestingly, the largest of firms (with greater than 5,000 employees) appear to have gone through the most significant learning-curve – as they seek to understand how SaaS (as well as Open Source) will become fully interwoven into the fabric of enterprise architecture. In fact, only two years ago, our research indicated significant resistance to SaaS among large-company CIOs – but our most recent research indicates that only 4 percent of companies with greater than 5,000 employees are planning not to deploy SaaS.

This is a significant change – and shows how SaaS will reach into the largest of companies, as well as small-to-mid size enterprises.

Executives at mid-sized firms indicate greater familiarity with SaaS than executives at other sizes of firms. Firms with between 100 and 499 employees showed by far the greatest familiarity with SaaS (86 percent – "familiar", "very familiar", or "extremely familiar") – 5 percent to 20 percent higher than all other company sizes.

A greater percentage of mid-sized firms are using or planning to use SaaS. Forty five (45) percent of firms with between 100 and 499 employees are using or expanding their use of SaaS by year-end 2008.

The next-closest group, "Large" firms with between 1000 and 4999 employees, showed 43 percent either using, planning to use or expanding their SaaS usage by year end 2008. 

While satisfaction with SaaS solutions is very high across all sizes of customer firms, executives at mid-sized firms show higher satisfaction with their current SaaS solutions than do executives at other sized firms.

And that high satisfaction includes more areas of SaaS than with either Small or Large firms. Amazingly, 95 percent of executives at firms that we surveyed with 100 to 499 employees (representing almost 25 percent of our sample) indicated they were "satisfied" with their overall SaaS experience – with the average of all firms registering a whopping 84 percent satisfaction rate.

Saugatek defines "Small" companies as those with less than 100 employees.
Mid-sized firms are those with 100 to 999 employees.

Large firms are those with 1,000 or more employees.

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