Businesses to increase SaaS spending over next two years: Gartner

Nearly three quarters of enterprises in Europe are planning to increase spending on software-as-a-service (SaaS) over the next two years, as adoption of cloud-based solutions gathers pace across the globe.

According to an new survey by Gartner, investments in SaaS are expected to increase across all regions. Seventy-seven percent of respondents expected to increase spending on SaaS, while 17 percent plan to keep spending the same.

In Europe and the US, enterprises are beginning to use SaaS as a replacement for legacy applications. Gartner said that 71 percent of European enterprises were planning on further cloud spending in the next two years.

This differs from the Asia/Pacific region, where the primary adoption driver of SaaS is net new deployments because many of the users are relatively new businesses with few legacy systems.

“Seeing such high intent to increase spending isn't a huge surprise as the adoption of the on-demand deployment model has grown for more than a decade, but its popularity has increased significantly within the past five years,” said Charles Eschinger, research vice president at Gartner.

“Initial concerns about security, response time and service availability have diminished for many organizations as SaaS business and computing models have matured and adoption has become more widespread.”

Customer relationship management (CRM) and enterprise content management (ECM) were highlighted as the applications most often being newly deployed, while supply chain management (SCM), web conferencing, teaming platforms and social are mostly chosen as replacements for on-premises solutions.

Eschinger said the decision to deploy SaaS-based applications within an enterprise is dependent on the business-criticality of the solution, as well as geography, business agility, usage scenario and IT architecture.

“Few organisations will completely migrate to SaaS. These organisations will live with a mix of SaaS and traditional on-premises application deployment models with a focus on integration and migration between different deployment models,” he said.

Gartner's report, “Survey Analysis: Buyers Tell Us About SaaS and Cloud Adoption Through 2014,” is based on interviews with 556 organisations across 10 countries and within four regions.

Additional analysis will be discussed at the Gartner Data Center Conference, 3-6 December in Las Vegas.