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SaaS: Europe Prepares for SaaS Boom

By Dick Weisinger

Europe typically lags the US in technology trends by about 18 months and is just now starting to begin to accept SaaS as the US did in late 2005.

Saugatuck Technology’s recent report about on-Demand companies in Europe is predicting that SaaS is ready to boom in 2007. The Saugatuck report finds that the US and Europe are a different points in the adoption of SaaS. The US has passed the point of coming to grips with acceptance of the technology and implementation of point solutions — it has moved on to trying to fully integrate the technology into the corporate IT strategy.

Europe is still just testing the waters of SaaS. While there is no lack of home-grown European providers entering the market, companies in the US may have an initial edge with their past experience and more developed platforms. Companies like Salesforce.com, NetSuite and WebEx are likely to benefit from the growing SaaS market in Europe.

Early technology adopter companies in Europe tend to be UK, Ireland and Scandinavia.  Trends then typically flow across the continent into France, Germany, Spain, Italy, and eventually into Eastern Europe.

Saugatuck is predicting that European SaaS adoption will increase from 16.9 percent in 2006 to 33.8 percent in 2007, compared to an increase from 35.3 percent to 46 percent in North America.

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