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SaaS: Can SMBs be Convinced?
SaaS is scaring away SMB customers. On the one hand, SMBs are intrigued with the business proposition offered by on-demand solutions provided as a service, but when asked directly about SaaS, there is a feeling of suspicion and hesitancy. Much of the fear people have is just the term SaaS. These are the results of a new IDC report called “The Adoption of Software as a Service in Small and Medium-Sized Businesses: Perception Versus Reality (March 2007)“. The survey was conducted with 614 small businesses and 418 medium-sized businesses.
SMBs are worried about security and a lock-in of regular monthly payments. While SaaS providers have done a good job in addressing security issues in their applications, the general perception is that the problem still exists.
“The concept of software as a service is intuitively appealing as a method of software delivery to small and medium-sized businesses, but they have not been adopting SaaS as quickly as originally anticipated, even though the reality of their move to SaaS is greater than their perception,” says Merle Sandler, senior research analyst in the Small and Medium Business Markets program at IDC.
Despite the hesitancy, SaaS is seeing growth among SMBs. 5.1% of small companies and 15.2% of medium-sized companies expect to adopt a SaaS solution within the next 12 months. Small businesses most often cite CRM as their first test application of the technology, while medium-sized businesses tend to cite payroll and HR applications.
