Last week, Google released its 2009 Communications Intelligence Report, covering the impact and current state of cloud applications/SaaS on IT. It was based on a survey of 1125 IT decision makers and perhaps predictably, it offered a positive commentary and outlook for cloud applications. That said, I think this report raised a number of interesting, sometimes surprising points that are worthy of note -
Companies adopt SaaS for a variety of reasons - Although the report calls out "ease of use" as the primary motivation for adopting SaaS, it only garnered 22% of the responses. "Product effectiveness" and "product features" followed with 15% each. I think this says that while "ease of use" is a big driver, it doesn't overshadow the fact that the product has to deliver value to the customer in terms of features and capabilities. Making an application "SaaS" or "cloud based" or repositioning a product as such doesn't necessarily make the product great or mean that it'll deliver the requisite value. As far as product is concerned, SaaS or cloud computing isn't a sort of magic pixie dust that overcomes a lack of features, poor design or reliability issues.
Cost isn't as significant a factor as you might think - Much has been made of how cost effective SaaS is from a TCO perspective. But this report actually highlights what I believe is a reality in the market - that buyers see cost savings as a secondary benefit with regard to deploying SaaS applications. Are there cost savings? Absolutely, but it is not a big parameter in the desicion making process
SaaS users are more satisfied with their solution than the non-SaaS users - it's a marginal but real advantage in terms of customer satisfaction
Security & compliance is a big issue for SMBs - SMBs IT organizations consistently feel more challenged with handling security & compliance issues relative to their large enterprise brethren. This is an area where SaaS vendors can add value to them.
Top 3 cloud applications doesn't include CRM - Messaging, email security (spam filtering) and web security are the top three in-the-cloud applications. The surprise here is that despite Salesforce.com's success, CRM isn't listed among the top three
The report's bottom line conclusion? - cloud applications are now clearly mainstream.
If you're interested, you can read the entire report here.
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