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SaaS: 2012 Was a Big Year for Adoption — Expect More of the Same in 2013

By Dick Weisinger

The use of SaaS in businesses is reaching the point where it is the norm rather than the exception, with adoption of the technology soaring over the past year.  Gartner finds that over the past three years that 71 percent of corporations have started using some form of SaaS and that of those companies 77 percent plan to increase their spending.  Going forward, Gartner estimates that by 2015 the size of the SaaS market will grow from $16 billion today to more than $21 billion.

For many mid to small-sized businesses SaaS offers them capabilities that had previously been economically not feasible.  An affordable subscription model for software that provides features to help them streamline and improve the operations of their businesses is very attractive.  Adoption in larger companies has been slower because there is typically a legacy system already in place that requires some effort to transition away from.

David Cappuccio, at Gartner, noted that larger companies are looking over their portfolio of applications and identifying which are critical to the business and keeping those in house while moving non-critical applications to SaaS.  In many cases critical applications, those that could result in large monetary or reputational damage if they went down, account from only about 15 to 20 percent of all their applications.

Charles Eschinger, research vice president at Gartner, said that “Seeing such high intent to increase spending isn’t a huge surprise as the adoption of the on-demand deployment model has grown for more than a decade, but its popularity has increased significantly within the past five years.  Initial concerns about security, response time and service availability have diminished for many organizations as SaaS business and computing models have matured and adoption has become more widespread.”

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