Saas, or software as a service, applications which have been growing in popularity have passed the early adopter phase and are now at customer acceptance mode.  You may be surprised to know that over half of all US companies in the US and Canada are using one or more SaaS based solutions.  The demand has accelerated for the new ERP, enterprise resource planning entrants into the market as companies are scrambling in this economic rollercoaster to cut cost and drive more profits to the bottom line.

Saas, or software as a service, applications which have been growing in popularity have passed the early adopter phase and are now at customer acceptance mode.  You may be surprised to know that over half of all US companies in the US and Canada are using one or more SaaS based solutions.  The demand has accelerated for the new ERP, enterprise resource planning entrants into the market as companies are scrambling in this economic rollercoaster to cut cost and drive more profits to the bottom line.

The key drivers to the popularity of Saas are its low capital requirements to get started, its rapid speed of integration and deployment, and the low IT resources required to take on a new SaaS sytem.  These three factors are a triple win for companies and their ROI hurdles.  The high adoption rate of over 50% of US companies indicate that these solutions are a no brainer for both large and smaller sized companies as they strive to get more revenues and save money.

Analysts agree that above and beyond the technical benefits of these enterprise applications, in this economy the pay as you go mentality is a key driver for the demand of these applications.  The 35% growth rate of SaaS solution in 2008 will be hard pressed to maintain its pace in 2009, however, the current user base and adoption trajectory will make SaaS software a formidable competitor to the traditional on site ERP applications that have ruled the marketplace over the last two decades.

As companies become more familiar with SaaS applications, the number of SaaS products and vendors in the market will continue to grow.  The demand and popularity of these applications are driving traditional on premise ERP vendors to develop their own SaaS based solutions to compete with the wave of new entrants in the enterprise software space and maintain current market share levels.  Over the next decade, analysts are projecting that one third of all business software, not just enterprise software, will be an SaaS solution.

Although there are powerful SaaS applications on the market today, a comprehensive enterprise solution that is SaaS based does not exist.  Companies looking for a one stop solution will need to go with the on premise software on the market place such as SAP and Oracle.  However, given the flexibility, low capital, faster deployment of SaaS based solutions, IT managers should seriously consider the technology trends of Software as a Service systems before making any enterprise wide technology decisions for their organization.

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rich