More SMBs Using SaaS, but Adoption Could Stall

Ann All

Earlier this week, I blogged about a Forrester Research study that seems to indicate that while growing awareness of software-as-a-service is spurring increased adoption among SMBs, it is also causing more SMBs to question the value of SaaS.


Another newly released study about SMBs and SaaS, this one by Access Market International Partners, dwells a bit more on the positive side of the adoption story. According to an AMI-Partners news release published on Tekrati, 21 percent of small businesses (1-99 employees) and 31 percent of medium businesses (100-999 employees) use SaaS, a twofold increase since 2004.


Interestingly, AMI-Partners says that mid-size businesses spend an average of six times more a year on SaaS than their smaller counterparts, with the largest of the MBs (500-999 employees) spending the most.


Like Forrester, AMI-Partners thinks that SaaS vendors need to up their game to further boost adoption levels. Says analyst Sau Lam:

... more work is required to propel SaaS to the next level of growth. SaaS vendors need to intensify campaigns to educate and spark interest among SMBs that are not yet considering SaaS, identify other needs that existing customers have and develop and partner to extend their offerings to increase share of wallet. In addition, they need to build channel programs with partners that can persuade SMBs that are not yet considering SaaS to give it a serious look.

The lack of a well-defined sales channel could develop into a major pain point for SaaS vendors. In my recent blog about a company that runs most of its business on SaaS, I note that one of its executives mentioned difficulty in finding and testing available SaaS applications as a potential problem for SaaS newbies.

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