Vying for the Enterprise: SaaS Vendors Can't Shake Integration Concerns


Given the results of recent Gartner research, software-as-a-service providers might want to focus more on integration problems-assuming, of course, they want to be contenders in the enterprise.


Even though it's been pointed out to me on various occasions that integration is also a problem with on-premise organizations-and thus, shouldn't be a reason to avoid SaaS solutions - the reality is that <strong>SaaS introduces new complexities to integration</strong>.Hence, <strong>all the customer complaints about SaaS integration problems</strong>.


The other reality is enterprises are already invested in on-premise solutions, but they aren't invested in SaaS. As a shoe salesman pointed out to me recently when I was trying to find a new shoe, "We're trying to eliminate problems, not add to them."


So, I can't say I was surprised by Gartner's finding that ease of integration and functionality (29 percent) ranked among one of the top considerations enterprises use for evaluating SaaS. Although, to be fair, it ranked below meeting technical requirements (46 percent) and security/privacy/confidentiality concerns (38 percent).


Thirty-eight percent of enterprises that haven't tried SaaS specifically mentioned integration as a reason, with 42 percent mentioning cost and 33 percent listed a failure to meet technical requirements


The survey of 333 enterprises in the U.S. and U.K. also found most companies are pretty neutral about their SaaS experience, giving it an average 4.74 on a 7-point scale. It seems U.S. companies were slightly happier with SaaS, rating their experience an average of 4.94, compared with 4.34 in the UK.


As Silicon.com demurely pointed out, this could really put a damper on predictions that all software will be hosted by 2013.


Unless, of course, SaaS companies find a way to address these problems head-on. Gartner Analyst Twiggy Lo, in a released statement, offered this advice to SaaS companies:

At a time when SaaS is becoming more of a consideration for more enterprises, the results of this survey will be somewhat disquieting for SaaS vendors. Underwhelming customer satisfaction scores, hesitation over the true cost of SAAS solutions and concerns regarding how successfully SAAS applications can be integrated with other applications all point to issues that will need addressing and resolving.

To truly impress enterprise clients, SaaS vendors need to offer "integration strategies that recognize the heterogeneous environments that most customers now run and will run in the future," as well as a lower TCO and easier deployments.


Despite these mediocre survey results, SaaS adoption will grow. While 58 percent plan to maintain the SaaS status quo, 32 percent say they'll expand their use of SaaS. Only 10 percent say they'll discontinue or decrease use.


It'll be fascinating (for me, at least) to watch what happens through 2009 and 2010. I'm curious to see whether SaaS vendors will tackle integration on their own or through partnerships. And, as David Linthicum recently pointed out, SaaS could play a role in making or breaking some SOA vendors.


Assuming, of course, that SaaS vendors themselves don't drown in the undertow of their own hype.