DOWNLOAD: Saas TCO Calculator
Quickly compare the costs to an on-premise solution
Earlier this year Gartner found most companies using software-as-a-service seemed pretty happy with it. However, it hinted at possible problems down the road, noting relatively few companies had policies governing evaluation and use of SaaS.
One of Gartner's best-known methodologies is its Hype Cycle, which it uses to illustrate the adoption and business application of various technologies. Gartner didn't break SaaS out separately in 2009's Hype Cycle, released last August. However, if it was considered part of cloud computing (which seems logical), it was at the Peak of Inflated Expectations. As Gartner said:
As enterprises seek to consume their IT services in the most cost-effective way, interest is growing in drawing a broad range of services (for example, computational power, storage and business applications) from the "cloud," rather than from on-premises equipment. The levels of hype around cloud computing in the IT industry are deafening, with every vendor expounding its cloud strategy and variations, such as private cloud computing and hybrid approaches, compounding the hype.
If SaaS follows the usual technology adoption trajectory, it will spend some time in what Gartner calls the Trough of Disillusionment before emerging into the Slope of Enlightenment and Plateau of Productivity. SaaS adopters will help topple SaaS from the peak into the trough, hints a new Gartner research note.
Gartner found many companies are simply transferring their on-premise software bad practices to SaaS, reports eWEEK. Notably, companies are ending up with "shelfware-as-a-service" because they purchase too many SaaS subscriptions. Gartner analyst David Cearley said this can happen when companies buy with volume discounts in mind or don't reassess their software needs after trimming staff.
To stay out of the trough, Gartner recommends companies follow four practices:
Value assessments, governance, needs-based vendor evaluations and integration strategies should obviously be part of any software implementation. But it's easy to shortchange some of these things, or forget them entirely, when sitting atop the Peak of Inflated Expectations. Frankly, some vendors count on this.
Another interesting data point from the Gartner research note: Despite its growing popularity, SaaS accounts for a rrelatively tiny percentage of total IT deployments. SaaS represented 3.4 percent of global enterprise spending in 2009, up slightly from 2.8 percent in 2008.