According to Gartner, companies are buying SaaS (Software as a Service) at a record rate. At the same time, they are pushing their existing legacy enterprise applications out to the curb. While the rise of IaaS (Infrastructure as a Service) and PaaS (Platform as a Service) dominates cloud computing news, SaaS providers, such as Salesforce.com, have busily worked themselves into enterprises and displaced existing legacy applications.
“Much of SaaS adoption is fairly recent, Gartner found, with 71 percent of responding organizations overall reporting that they have been using it for less than three years. Brazil showed the highest level of new users; 27 percent said they had adopted SaaS less than a year ago, Gartner said.”
This means “Big Software,” including SAP, Oracle, and the other usual suspects, need to think long and hard about how they join the cloud, or how they will fight to keep their assets inside enterprises. Of course, all have declared victory in the movement to the cloud, but few have significant penetration in the emerging cloud computing market.
SaaS was the first proof point that cloud computing was a cost effective and viable technology shift. The rise of big SaaS players, such as Salesforce.com, is about a decade old now.
SaaS has become an accepted way to consume these applications, and the cost and efficiency benefits are just too compelling for enterprises to ignore. The millions of dollars that are spent on legacy software license fees and maintenance, not to mention hardware and data center space, can shift to more productive uses. Bad news for “Big Software,” good news for the SaaS players and the users.