SaaS booms in UK, France

Johannesburg, 30 Mar 2009

UK and French companies are significantly ahead of those in Germany in terms of adoption of software-as-a-service (SaaS) applications, according to a recent survey by Gartner.

However, Gartner said the responses from German organisations suggest the difference in adoption levels will shrink if users follow through on their plans for SaaS adoption in 2009.

The analyst says 71% of French survey respondents revealed their organisation currently uses SaaS for enterprise applications, compared to 68% in the UK and 45% in Germany.

Chris Pang, principal research analyst at Gartner, says: “We believe that North American vendors have enjoyed greater success in the UK because less effort is required to localise products and sales and marketing strategies. However, other European countries are also willing adopters of SaaS applications, and international vendors not already active in the French and German markets should certainly investigate opportunities for growth here.”

Gartner found that customer relationship management (CRM) is the most popular SaaS application across the three countries, ahead of enterprise resource planning (ERP), content communications and collaboration (CCC) and supply chain management (SCM).

CRM's popularity is likely a result of the media exposure of high-profile vendors such as salesforce.com, the analyst firm says. In addition, CRM SaaS applications tend to cover a wider range of functions in common processes, such as sales automation, marketing automation and customer service support, whereas SaaS applications such as ERP, CCC and SCM tend to focus on specific areas of business process support, such as expense management, talent management, recruitment, Web conferencing and procurement.

More than 50% of the survey respondents saw SaaS as a viable alternative to an existing on-premises solution, and 40% saw SaaS as a complementary addition to their IT environments.