Large companies appear to be jumping en masse onto the software-as-a-service bandwagon, according to a new survey of CIOs by management consultants McKinsey & Company. The survey found that 61% of North American companies with sales over $1 billion plan to adopt one or more SaaS applications over the next year, a dramatic increase from the 38% who were planning to install SaaS apps in 2005.<\/p>\n
Although the full survey results haven’t been made public yet, I got a preview of the findings last week from two leaders of the study, Kishore Kanakamedala and Abhijit Dubey. McKinsey, they told me, regularly surveys a panel of CIOs and other senior IT executives from big companies in the United States and Canada to track their plans and priorities. The companies included in the surveys are chosen from a cross-section of industries that mirrors the makeup of the overall U.S. and Canadian economies. The most recent survey was completed a few weeks ago; the prior one was completed in Summer 2005.<\/p>\n
Kanakamedala and Dubey see several factors driving the rapid increase in the adoption of SaaS. Some of the factors are economic. CIOs, they said, are coming to see SaaS as offering lower up-front costs, lower total ownership costs, and faster implementation than traditional licensed software. That substantially increases the likelihood a new application will provide an attractive return on investment.<\/p>\n
Also propelling the trend is a desire for greater vendor accountability. CIOs, explained the consultants, have long been frustrated at their inability to get clearly defined service commitments from software vendors. Because the vendors don’t own the infrastructure their applications run on, they’ve been able to avoid accountability for the performance of their software. But with SaaS, there’s no such accountability gap. Because SaaS vendors are responsible for the infrastructure as well as the application, they have nowhere to hide should something go wrong. Buyers get an unambiguous, single point of accountability for performance – a big plus, in the eyes of CIOs.<\/p>\n
The most popular SaaS business applications, according to the McKinsey study, are for human-resource management, billing and order entry, and sales management. Those were also the most popular in the 2005 survey.<\/p>\n
The embrace of SaaS, say Kanakamedala and Dubey, is part of a broader shift in the way big-company CIOs think about information technology. CIOs are rapidly abandoning the assumption that they should own and control their entire IT architecture. Instead, they’re embracing the idea of a “hybrid architecture” that combines components maintained internally with components hosted or otherwise supplied by outsiders. This model, say the consultants, promises to bring greater efficiency as well as greater flexibility – for both IT and the business in general.<\/p>\n","protected":false},"excerpt":{"rendered":"
Large companies appear to be jumping en masse onto the software-as-a-service bandwagon, according to a new survey of CIOs by management consultants McKinsey & Company. The survey found that 61% of North American companies with sales over $1 billion plan to adopt one or more SaaS applications over the next year, a dramatic increase from […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-594","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=594"}],"version-history":[{"count":0,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/594\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}