New Saugatuck Report: Rapid Rise of SaaS/Cloud Business Use Threatens IT Mission and Roles

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Research indicates rapid change to, possibly through, hybridized environments

“The big shifts that we see toward more pure-play Cloud in a short amount of time...suggest that the roles and mission of IT leaders and organizations within enterprises are going to change significantly, and change very rapidly.

IT and business leaders advised by Saugatuck Technology have long known that a shift toward blended, hybridized Cloud-plus-legacy, IT and business technology-plus-process environments is underway, and what the impact of such changes will be on their organizations and operations.

What no one knew until today is that this shift is not only happening at an accelerated pace, but that IT and business leaders expect it to be part of a transitional phase to a pure-play Cloud-dominant business and IT architecture within four years.

If these leaders are correct in their expectations, then IT leaders and organizations are likely to suffer through an intense period of change that will alter their core mission and roles at least once, if not twice – and which will reward the most innovative with the greatest ability to enable business agility and flexibility.

These are among the core findings of the latest survey research and analysis report published by Saugatuck Technology Inc. Released today, Saugatuck’s 2012 Global Cloud Business Software Survey Data Report summarizes key global and regional trends in SaaS/Cloud adoption and use, including the business drivers behind those, as well as the trends and timeframes for SaaS/Cloud adoption through at least 2016 across a dozen categories of Cloud-based business software.

Data and analysis highlights from the report include the following:

  • Enterprise IT and business executives alike are focused on business goals that emphasize revenue growth from their existing business footprint combined with improving profitability rather than business expansion. This emphasis on improving existing operations and market profitability is a critical influence on IT acquisition, use, and management decisions.
  • Preferences for deploying new on-premises business software decline rapidly over the next two years, as enterprises shift toward hybrid on-premises+Cloud offerings. However, much of that hybrid focus shifts toward pure-play SaaS/Cloud within just a few years, suggesting a challenging transitional period for enterprise IT.
  • Meanwhile, SaaS adoption and use is shifting from a point-solution focus toward a more integrative approach favoring suites over best-of-breed solutions.
  • CRM, Collaboration, Customer Support, HR/HCM, and Collaborative Commerce will lead SaaS/Cloud solution demand through 201.6
  • However, traditional enterprise business management IT, especially applications and operations closer to the “money” (e.g., Finance / Accounting, Budgeting, Reporting & Planning and GRC) will be slower to migrate to Public and Private Clouds (especially in larger enterprises).
  • Data security, privacy, and integrity concerns rightly rank as top SaaS/Cloud adoption concerns, as they do with most other new forms of IT. But a high ranking of broad integration and customization concerns indicate that SaaS use is shifting away from point-solution-use and increasingly toward integrative business operation and management benefits.
  • The ability to prove SaaS ROI is improving, suggesting more and better SaaS awareness and management from procurement through usage and more rigorous acquisition procedures focusing on financial returns.
  • And while reducing IT and business costs remain top-of-mind when it comes to SaaS/Cloud adoption globally, business flexibility and agility overall rule enterprise SaaS decisions– especially among leapfrogging Asian enterprises.     

“After years of uncoordinated SaaS acquisition, adoption, and use, we’re seeing a huge shift of sentiment and action toward coordinating and managing SaaS instances within enterprises for measurable business improvement. IT leadership is really in place now, and best practices are being implemented to help business leaders realize the process and operational changes that they urgently need to improve their go-to-market effectiveness,” stated Bruce Guptill, Saugatuck’s SVP and Head of Research and lead author of the new report.

“The big shifts that we see toward more pure-play Cloud in a short amount of time, coupled with a clear need to emphasize business improvement and flexibility, suggest that the roles and mission of IT leaders and organizations within enterprises are going to change significantly, and change very rapidly. They’re going to have get a lot more innovative, and do it a lot more quickly, than most are prepared for,” added Saugatuck CEO and founder Bill McNee, who led development of the research survey and contributed to the report.

The research report is being published and distributed to clients of Saugatuck’s Continuous Research Services(CRS-Base) subscription research and inquiry program. It will also be used by Saugatuck to brief and inform its clients, influential providers, and select other parties. Details regarding the survey, methodology, and demographics can be found in the Appendix to the report. Additional in-depth analysis will be provided to Saugatuck CRS clients through a series of Strategic Research Reports and Strategic Perspectives.

An abridged version of the report is also available for downloading by Saugatuck research participants and registered members of Saugatuck’s website by clicking here.

About Saugatuck Technology
Saugatuck Technology, Inc., provides subscription research and management consulting services focused on the key market trends and disruptive technologies driving change in enterprise IT, including Software-as-a-Service (SaaS), Cloud Infrastructure, Social Computing, Mobility and Advanced Analytics, among others. Founded in 1999, Saugatuck is headquartered in Westport, CT, with offices in Falmouth, MA, Santa Clara, CA and in Frankfurt, Germany. For more information, please visit http://www.saugatucktechnology.com or call +1.203.454.3900.

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Chris MacGregor
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