June 13, 2017
In recent blog posts, we’ve discussed how the IT industry is moving away from on-premise hardware and applications towards cloud-hosted services and SaaS applications. This trend is in large part because of the widespread adoption of the cloud and the availability of these services.
Software developers can save time and money in development by hosting the application in the cloud and generate consistent revenue with a monthly service model. A perfect example of this dynamic is Microsoft releasing Office 365. What was once a software installed on-prem or in the end-user’s device is now a Software as a Service (SaaS) application.
Of course, innovation and adoption are two different things and happen at different rates. Yet, the average business is catching up, and there’s no better evidence for this trend than how businesses are using SaaS applications.
SaaS Stats from BetterCloud.com
BetterCloud.com recently published results to a survey providing some surprising stats on SaaS adoption.
How Popular Is SaaS?
In short, SaaS is very popular and becoming more so every year. According to the survey, companies are using on average 16 SaaS applications as part of their normal workflow. This figure is up 33% from the previous year which increased 50% from the year before. Furthermore, 75% of SMBs and 69% of enterprise organizations polled believe that by 2020, 80% of their applications (or more) will be SaaS.
Top Concern for SaaS: Cost
When these companies were asked what their top criteria for a successful SaaS application was, 59% said cost. This underscores precisely why the cloud is becoming so attractive. It reduces a company’s data center footprint by allowing them to avoid the need for more hardware. Plus, it saves on maintenance and refresh costs associated with supporting on-prem infrastructure.
Yet, the other advantage is not necessarily the number itself but its consistency. As a service, these applications are purchased through monthly subscription costs or other predictable pricing models, and the predictability can be very attractive for businesses. IT hardware can represent a significant capital expense for a business and budgeting for huge up-front and unpredictable costs can be difficult. SaaS offers a company stability.
Shadow IT: The Double-Edged Sword
With the advantages of the cloud and widely-available SaaS applications, there is also one glaring concern. Most employees today have access to a smartphone. It can be just as easy for these employees to download a SaaS application that has not been approved by the IT department, use it for business, and create security issues in the network. Wide-spread availability has its drawbacks as well.
Check out our blog post on How to Combat Shadow IT for more information.
Where to Go from Here
The writing is on the wall, and SaaS applications are quickly becoming the new normal. If properly researched and managed by the CIO and IT department, your SaaS applications can prove to be major assets for your business. Without the right strategy, it could lead to confusion, inefficiency, and a waste of money. Mindsight offers an IT consulting service known as the Path to the Cloud Roadmap in which our consultants can help you transition to using select SaaS applications and migrate your other business apps to the cloud. Contact Mindsight today to learn more.
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