Microsoft Survey Shows Increased SaaS Use
According to a press release posted on Microsoft’s website today, this will be the year when small and midsized businesses (SMBs) start truly adopting software-as-a-service (SaaS). The Microsoft article highlights the 2009 Microsoft SMB Insight Report, which focuses on trends in the SMB market. The biggest trends this year are all focused on, or a result of the weakening global economic situation. In response to the global recession, many SMBs are looking to streamline their operations in 2009 by doing less with more. SaaS seems to be one of the strategies they are using to accomplish this goal. According to the Microsoft report, 86% of SMBs reported they will be using SaaS by the end of the year. This is up from 66% last year.
SaaS has slowing been gaining market share for the past decade or so, but what really is SaaS? Basically it is a way of deploying a piece of software to a company or organization that requires no physical installation of the software on specific devices. It is essentially software on demand. Companies simply buy licensed access to the software for a period of time, and their employees are able to access it, via the web, from any device in any location. This greatly reduces initial deployment costs for a new piece of software, since individual licenses do not have to be acquired for every physical machine it will be used on. It also allows a software purchase to become a variable expense, since the number of licenses can change based on the current needs of the company. All of the often complicated hosting and updating duties are also performed by the licensing company, greatly reducing IT and hardware costs. Updates are applied to only one central server location, which ensures that all users worldwide are currently using the most up to date software.
For 2009, most all SMBs are looking to cut costs while making strategic investments in new technologies to increase their bottom line. SaaS fulfills both of these needs by decreasing IT, software licensing, and equipment expenses while giving smaller companies the access to software that was previously too expensive to consider. In the Microsoft report, 64% of all SMBs reported they will cut costs in 2009 by reducing spending on IT. SaaS was identified as a major role in reducing these costs, along with Virtualization (the top cost saving strategy) and IT Consolidation.
With over 90% of the world’s workforce employed by SMBs, they could be the catalyst that starts to bring the global market out of its recession. New ways of thinking about traditional IT and software solutions will play a role in helping these businesses succeed in 2009. A strategic investment in SaaS is a great place to start.
