SaaS failing to awe users

Despite the hype around Software-as-a-Service (SaaS) the technology is failing to impress many customers, according to recent research by analyst firm Gartner.

The Dataquest Insight: SaaS Adoption Trends in the US and the UK report reveals that, while the technology better understood as a viable model, this is not translating into the panacea many believed it would be.

"Our research findings did not exactly provide a ringing endorsement of SaaS, in fact I would go as far as to say that satisfaction levels among SaaS users are little more than lukewarm,” said Ben Pring, research vice president at Gartner.

"Although macroeconomic factors would seem to favour SaaS providers, almost two thirds of respondents said that they planned only to maintain their current levels of SaaS in the next two years."

According to the research, users are generally at least somewhat satisfied with SaaS, rating it with a score 4.74 on a 7-point scale on average.

Despite this, only a third (32 per cent) of organisations plan to expand their use of SaaS over the next two years, while nearly six out of ten (58 per cent) will maintain currently levels. The remaining 10 per cent are split between decreasing and discontinuing use of the technology.

The revelation came as little surprise to Rob Lovell, chief executive officer at hosted IT firm ThinkGrid.

"Despite the much talked about benefits of SaaS and cloud computing, many vendors are still pretty new to the whole services model so it's understandable that there is frustration in areas such as reliability and post sales support," he said.

"For SaaS to succeed, vendors must implement tried and tested practices such as 99.99 SLAs and 24/7 telephone support from the outset. These processes have been developed over the years by traditional service providers and significantly improved the customer experience."

When asked about the drivers behind SaaS adoption, nearly half (46 per cent) cited technical requirements as the top overall consideration, followed by security, privacy and/or confidentiality at 33 per cent and ease of integration and functionality needed for business unit owners, both at 29 per cent.

Of those who opted out of using SaaS, 42 per cent said it was too expensive, while 38 per cent reckon it would be too difficult to integrate with existing systems and a third said it didn't meet their technical requirements.

"At a time when SaaS is becoming more of a consideration for more enterprises, the results of this survey will be somewhat disquieting for SaaS vendors," added Twiggy Lo, principal research analysts at Gartner.

"Underwhelming customer satisfaction scores, hesitation over the true cost of SaaS solutions, and concerns regarding how successfully SaaS applications can be integrated with other applications all point to issues that will need addressing and resolving."

The report concludes that in order to succeed it is imperative that SaaS vendors focus on actually delivering on the promise of a lower total cost of ownership and reaffirm the fundamentals of the SaaS model, namely that it is lighter, simpler, more intuitive, more agile and more modest.