SaaS: Bottom Line Savior or Alotta Hype?

The big news seems to be the apparently imminent takeover of SaaS to the point that there would be no point in having on-premise IT. But Forrester Research throws a little cold reality on the overheated crowd of SaaS vendors.

According to analyst Michael Speyer, while adoption of SaaS by SMBs increased to 15% from 2006 to 2007, those were merely the early adopters. Over that same time period, non-adopters became more skittish about it.

Several concerns were cited: Total Cost of Ownership, security, integration with the rest of their software, and how the application would perform. In particular it has been mentioned on the Morph Labs Blog in July that any company succumbing to the allure of someone else taking care of IT should have several questions answered first, including details about their disaster recovery plans for your data.

Forrester also noted that while SaaS can indeed save money it will only do so up to a certain point. In other words, large enterprises would be better off keeping IT on premises.

It sounds like there are a few kinks to be worked out but isn't that life in IT?

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