Current Econonic Crisis is Good For SaaS…

Yesterday I read that IDC (the IT industry analyst firm) has revised its forecast (upward) regarding the adoption by US companies of the Software as a Service (SaaS) delivery and subscription, and that the current economic climate appears to be accelerating the SaaS adoption trend:

"The analyst firm says that recent surveys and customer interviews
support its finding that the harsh economic climate will actually
accelerate the growth prospects for the SaaS model, as buyers opt for
easy-to-use subscription services which meter use, not future capacity,
and vendors and partners look for new products and recurring revenue

Good news for SaaS providers…

"While the economic crisis is making its presence felt in many parts of
the IT industry, it appears that the Software as a Service (SaaS)
market may escape unscathed, as IDC has found that it will expand
rather than contract over the coming year.

…SaaS services have benefited by the perception that they are
tactical fixes which allow for relatively easy expansion during hard
times, and several key vendors finished the year very strong, reporting
stable financials and inroads into new customer-sets."

A couple of other encouraging highlights cited from the updated survey report Economic Crisis Response: Worldwide Software as a Service Forecast Update:

  • By the end of 2009, 76 percent of U.S. organisations will use at least one SaaS-delivered application
  • The percentage of U.S. firms which plan to spend at least 25
    percent of their IT budgets on SaaS applications will increase from 23
    percent in 2008 to nearly 45 percent in 2010

Interviews with SaaS providers by IDC also uncovered several
issues (a number of which are addressed directly by the Intuit Partner Platform (IPP):

  • cash-flow shortfalls related to slow-paying current
    clients (IPP handles all the billing automatically for SaaS app partner developers)
  • liquidity challenges stemming from tight credit at lenders
  • limited resources to scale up with expanded infrastructure to
    support new customers and new service offerings, could create some
    issues with rapid growth of the SaaS market – at least in the longer
    term (IPP provides all the infrastructure for scale, so no capital investments are required by IPP partners)

So, it seems like this is a great time for software developers to partner with Intuit and take advantage of the increasing demand for SaaS solutions that solve real business needs for Intuit's small business customers.






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