news It was only a few years ago that the term “Software as a Service” was almost anathema in Australia’s IT industry, with almost all organisations preferring to deploy applications on an in-house basis. But according to respected analyst house Telsyte, in certain categories the deployment model is now “mainstream”.
In a statement issued this week, the company briefly outlined some of the findings from its Australian Enterprise Software Market Study, an 80 page report which goes into depth on the software being used in Australian enterprises, examining more than 100 companies and analysing 25 enterprise software categories. The research is based on interviews with 324 CIOs and IT decision makers in organisations with greater than 20 employees on their use and preferences of enterprise software.
The report found, according to Telsyte, that ongoing adoption of cloud-based software is making its mark on Australian organisations, with the Software-as-a-Service (SaaS) delivery model “reaching mainstream levels in software categories such as customer relationship management, email and collaboration”.
Telsyte’s research indicates SaaS penetration ranges from 19 percent to 63 percent across 25 different categories of enterprise software measured. This penetration rate includes businesses using the SaaS-only model as well as a hybrid SaaS and on-premise approach. The top SaaS categories are enterprise social media, e-commerce, B2B integration platforms, and big data storage. Telsyte expects this trend is set to continue with high intentions for many organisations to move CRM, ERP, email and groupware to the cloud within the next 12 months.
Telsyte’s research also found software investments would increase by more than 5 per cent in 2014 after a few years of being on hold. The growth in SaaS is in line with perceived costs savings achievable by taking the on-demand approach to software procurement.
Telsyte senior analyst Rodney Gedda said most CIOs cited “cost” as the most important factor when choosing an enterprise software solution, but “integration and interoperability” remained a high priority which would grow in importance as enterprises reled on a mix of on-premise and third-party IT systems.
“The SaaS delivery model can work well for many organisations looking to reduce their IT infrastructure requirements, but CIOs must keep a close eye on data integration and sovereignty, long-term subscription costs and configurability of SaaS applications in addition to the popular privacy and security factors,” Gedda said.
Over the past few months, Delimiter has reported on a number of major SaaS deployments. For example, retail giant Coles has revealed it is making use of Microsoft’s SharePoint Online solution, the New South Wales Government has several major projects under way in the area of SaaS-based enterprise resource planning systems and Tourism Australia is also planning to shift a number of its internal IT platforms into the cloud. State Governments such as Queensland and New South Wales are also trialling cloud computing projects in the area of email.
SaaS player NetSuite in particular has been quite active over the past six months in announcing new Australian customer wins, picking up companies such as Lonely Planet, Tree of Life and Vet-n-Pet, Guzman y Gomez, BioPak and others. Microsoft, Oracle, SAP, Salesforce.com, Google and other vendors have all also announced major SaaS deployments in Australia over the past 12 months, including in sensitive sectors such as financial services and government.