Software-as-a-Service is Surging in the Downturn
by Tamir ScheinokMonday, February 2nd, 2009
With all the bad financial news in the press, its nice to read an article about IDC analysts revising upward its projects for SAAS growth in 2009.
“SaaS’s counter-cyclical boom is entirely due to the enhanced attractions of the model when times are bad, says IDC:… the harsh economic climate will actually accelerate the growth prospects for the software as a service (SaaS) model as vendors position offerings as right-sized, zero-CAPEX alternatives to on-premise applications. Buyers will opt for easy-to-use subscription services which meter current use, not future capacity, and vendors and partners will look for new products and recurring revenue streams.”
As with any boom, there are some things to be cautious about. In my own buy-side experience, I have encountered a number of SAAS solutions where the SAAS turned out to be a marketing buzzword more than software design. Common among the masquerading solutions were the lack of free trials, high implementation costs and mandatory paid training.
My buying advice would be to spend time with a trial.
Be skeptical if there isnt a free trial. SAAS solutions should be relatively easy to deploy and manage. High implementation fees and mandatory paid training are signs that the solution will not be easy for you to use. Talk with existing customers and find out what percent of customers are renewing.
