Small and mid-sized businesses (SMBs) are nearly twice as likely to use software-as-a-service (SaaS) for business-critical operations than large enterprises, says IT market research and consulting firm, Saugatuck. Based on responses from more than 150 U.S. business and IT executives surveyed in January 2006, Saugatuck says that SMB... |
Small and mid-sized businesses (SMBs) are nearly twice as likely to use software-as-a-service (SaaS) for business-critical operations than large enterprises, says IT market research and consulting firm, Saugatuck.
Based on responses from more than 150 U.S. business and IT executives surveyed in January 2006, Saugatuck says that SMB executives are embracing SaaS as a business-critical, strategic investment at a much greater rate than are executives of larger enterprises.
The benefits of SaaS to SMBs, according to the firm, are:
Outsourcing expensive skills necessary for development, deployment, and maintenance of key applications
Provision of key infrastructure and capabilities as well as maintenance and upgrades without significant capital expenditure
Reduction of operating expenditures through flexible billing and payment
According to Saugatuck's profiling, SMB executives tend to be less risk-averse and more aggressive adopters of IT than their counterparts at larger firms, and this explains their willingness to commit critical operations to SaaS.
SMBs, the firm says, tend to:
Be less bureaucratic, enabling faster adoption of emerging technologies
Be smaller, with less-complex business systems and processes
Have a more favorable IT investment risk/reward ratio
Have less investment capital available.
The firm believes that today's net-native (standalone) SaaS offerings are quite good at some aspects of business-critical operations, but many SaaS providers are still immature when it comes to more sophisticated data integration, applications customization, and/or systems integration requirements.
Successful vendors will be those that find ways to master the channel. To reach the SMB market, vendors will continue to need value-added resellers and system integrators who help integrate the solution. However, other channels such as community banks and telecom companies may also be pursued, especially as the SaaS market ultimately penetrates the true small business segment (100 employees) where solutions will be completely verticalized, Saugatuck says. |
