SaaS, or Software as a Service, will experience growth in the coming year as more enterprises make the shift to Web-based applications. In 2011, industry analyst Gartner predicts that the SaaS market will reach $10.7 billion. Moreover, according to surveys conducted by Information Week, the percentage of companies using SaaS increased from 47% in 2010 to 60% in 2011.
Along with growth, continued evolution will characterize SaaS in 2011. Industry forecasts from Gartner, Forrester, Forbes and Information Week suggest that a number of trends are likely to appear in the SaaS 2011 landscape. These trends and issues include:
1. Product Maturation and Consolidation
2. Integration of Social Media and Social Software with SaaS Applications
3. Mobile Technology
4. Larger and More Diverse SaaS Deployments
5. Adoption of SaaS for New Procurements
6. Data Security
SaaS 2011 Trends and Issues
1. Product Maturation and Consolidation:
SaaS products and offerings will evolve in 2011. As technologies further mature and enterprises shift market demand, SaaS providers are expected to consolidate their product suites across the cloud computing stack. Some vendors (for example, Salesforce.com) have moved beyond providing solely SaaS products and are beginning to offer PaaS (Platform as a Service) products, which enable developers to build and run custom applications in the cloud. As Forbes predicts, “the vendors with both the best PaaS platform and ecosystem will win.”
2. Integration of Social Media and Social Software with SaaS Applications:
Another emerging SaaS 2011 trend is the application collaboration resulting from the integration of social media and social software with SaaS applications. Interestingly, however, Gartner reports that adoption rates for social software are slow among enterprises that currently use SaaS. This could possibly change as social media outlets become increasingly important enterprise tools and SaaS vendors begin to incorporate social software into their offerings.
3. Mobile Technology:
Mobile technology will also have an impact on the SaaS 2011 market. Vendors are increasingly publishing SaaS applications for mobile handheld devices, which means that SaaS offerings are becoming more accessible than ever. Salesforce.com has already ventured into Mobile SaaS territory, in addition to other SaaS vendors such as NetSuite.
4. Larger and More Diverse SaaS Deployments:
In terms of SaaS adoption among enterprises, Gartner reports that SaaS deployments are getting larger, with “more deals for thousands or tens of thousands of users.” At the same time, SaaS isn’t making the same impact across the board. Forrester reports that SaaS is making the biggest dent in CRM and HR applications as well as content management and e-purchasing applications. Enterprises, however, remain reluctant to adopt web-based database applications due to security concerns
5. Adoption of SaaS for New Procurements:
Analysts also predict that further SaaS adoption will likely occur for new procurements and for new business applications. This means that vendors who stay ahead of the curve and offer innovative cloud-based business applications will win converts. In some cases, private clouds can serve as a stepping stone to public clouds for enterprises that are unfamiliar with cloud computing.
6. Data Security:
Data security will remain a top concern for enterprises in 2011. Forrester observes that data management systems are more likely to stay on-premises as opposed to CRM and HR systems because enterprises want to protect their data with a firewall. According to Forbes, however, a number of enterprises have moved beyond asking whether or not the cloud is secure to inquiring how security is achieved in SaaS solutions. Forbes indicates that SaaS vendors must be able to address these specific enterprise security concerns in order to satisfy customers.
7. SaaS Integration:
Finally, with the increasing use of SaaS applications and other cloud-based solutions, enterprises will have to find ways to manage “SaaS sprawl” and integrate their disparate systems. To address the problem of cloud silos, i.e. the fragmentation of data across enterprise systems both on-premises and in the cloud, flexible integration solutions are needed. CloudHub, an Integration Platform as a Service (iPaaS), is one such solution that provides developers with the tools to easily integrate SaaS applications with legacy applications as well as cloud-to-cloud offerings. As SaaS expands and evolves in 2011, integration will clearly be a mission-critical priority.