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SaaS: It's Not Just About the Money

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Buying technology in many ways isn't so different from buying other goods and services. We consumers tend to be lured -- at least initially -- by low price. But we generally won't stick with something unless it meets -- or hopefully exceeds -- our expectations.

 

After some trial-and-error, we often find that the option that is neither the least nor the most expensive tends to be the one that does the trick. Those who shop with only price in mind most likely end up disappointed.

 

Similarly, many companies experience a kind of buyers' remorse with their outsourcing initiatives. Some that outsource simply to slash costs end up suffering when cost objectives aren't met and service suffers. Those that outsource to free up internal resources for more strategic work, to gain access to specialized talent or to meet spikes in demand are generally more successful.

 

Now a Yankee Group report suggests a similar effect for software-as-a-service deployments. According to an iTWire story about the firm's research, companies using SaaS cited reduced cost as the third most popular driver for adoption, behind improved application quality and performance and faster time to value.

 

Companies using SaaS specifically for business technology optimization (huh?) mention the ability to deploy without adding new infrastructure and reducing upfront costs more often than companies using SaaS for other reasons, notes the story, which also mentions the research was sponsored by HP.

 

As with outsourcing, our suspicion is that companies that buy into the considerable marketing hype and deploy SaaS with the idea that it will somehow solve all of their problems are going to end up disappointed.

 

As Jeff Kaplan, managing director of THINKstrategies, told us in an IT Business Edge interview earlier this year, "a lot of people are jumping on board, maybe with not the same level of expectation or education about what they should be looking for."

 

Kaplan also noted that -- again, similar to outsourcing -- due diligence takes on added importance as new providers proliferate to capitalize on growing interest. He says:

Users have to do a thorough job of investigating what is available so they can set the right expectations for themselves. The concept of on-demand is a relative term. There are many SaaS solutions that you can point, click, procure and use instantaneously. But there are many others that refer to themselves as on-demand which really do demand a certain amount of time and effort to deploy.

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