Adoption of hosted applications among large companies jumped last year, but
many CIOs and IT managers will not consider these software-as-a-service (SAAS)
products due to concerns about security, cost and integration, according to
a Forrester Research study.
In a 2007 survey of just over 1,000 IT decision makers, 16 percent said their
companies were either already using or piloting SAAS products, a 33 percent
increase from 2006.
Those who said they were either interested in or planning to pilot hosted applications
remained the same at 46 percent, while those who aren't interested dropped from
41 percent to 37 percent, Forrester said in the report, issued Wednesday.
Respondents who are favorable to SAAS products cite shorter implementation,
lower up-front costs and pay-as-you-go pricing as reasons, wrote analyst Liz
Herbert, the report's author.
Interest in SAAS isn't consistent across application categories. Popular applications
include those for human resources, collaboration and customer relationship management.
SAAS is less used for enterprise resource planning, supply chain management
and Web 2.0 tools like wikis, blogs and RSS.
Respondents who aren't considering SAAS products cited limitations in the ability
for hosted applications to be integrated with software they have installed in-house
and to be customized. These IT executives also believe that hosted applications
that are leased and paid for under a subscription model cost more in the long
run than software that is bought and installed on the company's servers. They
also mentioned a variety of security concerns, including fear about having the
software and data hosted in a third party's data center and concerns about application
performance and availability.
