SaaS: Is the SME marketplace ready?

Is the SME Marketplace ready for SaaS?

CPiO Cloud report questions 257 IT leaders in SME on readiness for SaaS

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SaaS: Is the SME marketplace ready?

The recession highlighted the fact that the traditional on-premise approach to IT acquisition is constraining innovation and, more dangerously, creating significant business risk. Despite a growing understanding of the concept of Software-as-a-Service (SaaS), some IT leaders are using outdated arguments about Internet reliability and security fears to avoid shifting to the new model.

This attitude is at complete odds with the overall trends in IT adoption across the developed world. According to Gartner, nearly 90% of organisations expect to maintain or grow their use of SaaS, with more than one third transitioning from on-premise to SaaS.

SMEs cannot afford to be left behind. Many have already made a move towards leveraging external IT expertise for support, maintenance, outsourcing and advice. Making the move to SaaS is the logical next step. However, they are constrained from making a valid comparison between on-premise and SaaS delivery options due to a lack of clear understanding of the existing IT cost base.

Some 23% of respondents do not know their annual IT costs and the overwhelming source of this cost is perceived to be the basic components of the infrastructure, from software license fees to essential hardware and peripheral maintenance (80%) and essential hardware and peripheral upgrades.

These organisations are patently failing to take into account the business cost associated with downtime – from lost productivity to missed opportunities and trading losses? Furthermore, in the current marketplace where many organisations are having to make redundancies, organisations are now paying for software licenses that will remain unused. Can the UK’s SMEs really afford to freeze or reduce IT budgets at a time when improvements to efficiency and productivity are key to retaining competitive advantage? When a managed service can deliver the same, or better, IT at the same, or lower price; when an organisation can have guaranteed access to the most up-to-date software versions and secure, reliable infrastructure; and those responsible for IT can be relieved of the tedium of day to day administration to concentrate on proactive exploitation of technology, isn’t it time to take a closer look at SaaS?

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