According to a report by BetterCloud, which surveyed more than 1,800 IT professionals, 73 percent of the respondents have said that nearly all of their apps will be running via software-as-a-service (SaaS) by the year 2020, with 38 percent claiming their company is already operating almost entirely on SaaS products. These figures aren’t too surprising when you consider that the SaaS industry is set to be worth more than $112.8 billion by 2019.
But are we actually heading towards total SaaS domination, similar to the “SaaS-Powered Workplace” that was hypothesized by BetterCloud? We’ve asked those in the know why SaaS is growing so rapidly, and what it means for the digital workplace.
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Why is the SaaS Industry Growing So Rapidly?
The average desktop computer, laptop, and smartphone all have more storage space and RAM than ever before — yet the demand for cloud-based applications is soaring. Why?
Low barrier for entry - “The SaaS industry is growing rapidly due to today’s rising demand for technology that boosts productivity and automates key tasks within enterprises. Brands prefer the SaaS model because of the low barriers to entry, efficiency, and the ability to stay current,” said Chris Lynch, CMO at Chicago, IL.-based Cision.
In the past, when you procured technology, you needed, “massive technical and [hardware] resources inside your company to make it work,” Lynch added. But with SaaS applications, brands can draft in the technology they need with nothing more than their billing details and perhaps an e-signature.
Removing burden from IT - Julie Roy, CMO at Los Angeles, Calif.-based Chrome River, noted that SaaS solutions have removed a “burden from internal IT teams”, and enabled businesses to focus on delivering “strategic initiatives”.
More agile - “SaaS solutions can be more easily configurable, and therefore [are] better [at] supporting changing business processes, teams, and general corporate strategy; enabling better agility to meet changing business needs,” explained Roy.
Less expensive - Krish Subramanian, CEO at San Francisco, Calif.-based Chargebee, commented on how the “improved affordability” now provided by SaaS solutions has enabled them to extend their reach to beyond enterprise organizations and help SMBs and startups to easily launch “revenue-generation vertical solutions” for a very specific target audience.
More control over the stack - Another factor that Subramanian observed is that SaaS solutions provide brands with greater control over their tech stack — a similar point to the one made by Lynch. “Brands can opt in and out of different services or solutions as they please [since they don’t need to commit to a long-term contract]. Customers have so much more control over their consumption nowadays and [their feedback] can be quickly processed [to] enhanced the [SaaS] software with incremental changes,” Subramanian said.
Finally, Subramanian added that, because many SaaS tools are able to replace very specific and often mundane employee functions Chargebee specifically has been able to, “free up time and help our employees become even more focused on activities that are strategic to the business.”
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Are We Heading for a Totally SaaS-based Digital Workplace?
Gartner expects SaaS to reach 45 percent of total application software spending by 2021 — clearly outpacing IaaS and PaaS technologies. That’s not exactly total domination, but it could open the door to a SaaS-dominated digital workplace (and indeed, a digital everything).
Lynch expects that a “majority” of companies will go full-SaaS in coming years, but added some caveats. “It’s always hard to predict how laws will shift around data management and governance. Right now, some companies run on-premise software not because they want to, but because they have [to comply to a] security requirement in terms of where their data resides,” Lynch explained. Most of the large SaaS players can accommodate this need, he noted, but for some of the newer players — where innovation is really the app itself – it may not always be able to satisfy those needs right away.
“Some companies may not be able to move entirely to a SaaS model based on what they do at their core or what their compliance outlook looks like,” said McClarity, adding that brands should exercise caution when shopping for a SaaS product.
Experts agree that organizations need to due their due diligence through proper research and by understanding the benefits to ensure that a positive change does not bring negative consequences.