Users seen flocking to cloud computing
Goldman Sachs has released an investor report that confirms what many in the IT field have been saying for quite some time: business users are increasingly moving in the direction of cloud computing.
The concept of Software as a Service (SaaS) a.k.a. cloud computing has received a lot of ink, especially over the last few years and in IT circles. The concepts and the processes involved in SaaS are now beginning to move into the mainstream, with financial and business analysts taking more interest in the phenomenon. The Goldman Sachs report issued last week says that the recent worldwide recession has accelerated SaaS adoption by business (and especially small business) as commercial users have needed to seek lower-cost solutions to their critical business problems, according to a CNET story.
Forty percent of respondents to their survey indicated that they would be more likely to use SaaS solutions in a weaker economy, due to possible cost savings, while only 4 percent said they would be less likely to use a cloud computing solution. Other excepts from the report follow:
- An “SaaS first” policy is being utilized in a majority of small and midsize businesses. Goldman’s survey notes that 58 percent of respondents now always consider an SaaS option when making an application purchase decision. At total of 39 percent say that they prefer an SaaS option, if available.
- Web conferencing and sales force automation continue to be the most utilized SaaS applications; accounting applications, including accounting and billing, show significant improvement.
- Accounting and billing, call center automation, and eRecruiting were the largest gainers, with 20 percent, 18 percent, and 17 percent increases, respectively, since April 2009.
- Applications such as data warehousing, supply chain management, and product life cycle management require more customization, or perhaps are more embedded within the core of a company than cloud applications. They are also utilized via SaaS by a smaller group of companies, which could impact the time to, or volume of, deployments.
- Amazon.com is used by 67 percent of the survey respondents. It is clearly the marketplace leader, despite being a relative newcomer to enterprise-level IT. For internal clouds, VMware’s leadership remains pronounced, with 83 percent of respondents using its virtualization technology.
- Platform-as-a-service layers are gaining momentum in the marketplace, dominated by Amazon’s Elastic Compute Cloud, or EC2, service, with 77 percent of respondents choosing EC2 as a preferred partner, well ahead of Google
- Forty percent of respondents indicated that they would be more likely to use SaaS solutions in a weaker economy, due to perceived total cost of ownership benefits
Reports such as this one underscore the migration of SaaS and cloud-based computing and storage into the mainstream of IT practices, a change that has taken hold relatively quickly over the last few years. Cost / benefit ratios are a large part of the success of SaaS, as is the simplification of internal IT processes, including the offloading of many security and up-time considerations. If we were wondering if SaaS was here to stay, this is the sort of report that screams “Yes!”
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