- Major Studies
- Market Assessments
Interviews with IT leaders who have implemented cloud-based business applications indicate that, while they are generally happy with their decision to go to the cloud, there can be significant costs associated with SaaS. Recurring costs often include per-user fees, platform costs, and partner per-user fees for complementary functionality. In addition, the up-front implementation consulting fees can be as costly as for on-premises systems.Cloud providers often argue that the real benefits of SaaS are not in direct cost savings but in the flexibility, agility, and scalability benefits that are derived from moving systems to the cloud. Nevertheless, for organizations to make intelligent decisions regarding cloud-based systems, it is important to understand the relative costs of SaaS vs. on-premises systems. In other words, does SaaS save money?
Why might adopters come to the opinion that SaaS does not save them money? There are at least four possibilities.
These four theories are not mutually exclusive. For example, SaaS may save money (Theory 1) and also allow vendors to appropriate some of the cost savings as extra profit (Theory 3). Or, a mix of on-premises and cloud systems do not save money (Theory 2), but it is still worth it for customers in terms of agility (Theory 4). Furthermore, the answer may be different for different SaaS applications. For example, perhaps cloud CRM saves money, but cloud ERP does not.
More Data Needed
The question is still unanswered. Generally, from the customer’s perspective, does SaaS save money?
To answer this question, Computer Economics has launched a survey. As part of our annual IT spending and staffing survey, we are looking for organizations that have moved most or all of their applications portfolio to the cloud. In other words, we are looking for organizations that have no internally supported data center, or at least, a minimal set of on-premises systems. We are asking these customers to take part in our regular annual survey, and we will compare the IT spending ratios of these select customers against our standard industry ratios for IT spending and staffing. We will also interview these customers to learn more about their experience with SaaS and the perceived value as well as challenges.Through this study, we hope to be able to answer three main questions. First, do companies that have gone largely to cloud computing spend less on IT than those that have not? Second, how does the mix of IT spending differ? Finally, where do customers see the business value of SaaS?
We already have a handful of respondents and the initial data is quite interesting. But we need more. If you are a company that has implemented all or most of your business applications in the cloud, please apply to take our survey. As an incentive, survey participants will receive $2,500 worth of research reports.Apply for the Computer Economics Survey