Australian companies becoming SaaSed off

Local companies the least satisfied in APAC with their Software as a service deployments, Gartner says

Australian companies are battling to get the most out of their software as a service (SaaS) deployments according to Gartner.

In recent research into SaaS adoption in the Asia Pacific, the analyst house found that Australian companies were the least satisfied SaaS customers, raising the most number of problems with their implementations.

Among these, difficulty with integration was the most significant problem, followed by a lack of functionality, limited return on investment, and data security.

“’First wave’ SaaS deployments have been relatively simple and ‘stand-alone’ and have not required sophisticated integration activities,” Gartner’s Principal Research Analyst, Twiggy Lo, said.

“As the scale of SaaS deployment grows, the integration bar is being raised. SaaS providers should realise that although they may be directly responsible only for their own application, it is how their application is used in a broader context that is key to the customer.”

Australian companies were also wary of SaaS due to difficulty and inflexibility of customisation, a lack of vendor support capability, and network instability, the research found.

According to Lo, much of this could be attributed to the fact that both end users and SaaS providers were on a learning curve. As a result, providers needed to set clearer expectations about the benefits and issues of SaaS.

“There is a lot of confusion in the market over what SaaS really is,” she said. “Many providers claim they provide SaaS but it’s really hosted application services with the cost spread out over the contract term, much like managed services and not on a pay-for-use basis.”

Looking at the wider regional SaaS market, Gartner found that the most commonly used SaaS enterprise applications were: financials, e-mail, sales, expense management, and customer service and support.

Examining the drivers for SaaS in the Asia Pacific, Gartner found that the two biggest were the perception that SaaS is more cost-effective than an on-premises solution from a total cost of ownership standpoint, and that SaaS is easier or faster to deploy than an on-premises solution.

“However, the perceptions of lower cost and faster deployment are not the case, in general, and these perceptions are highly dependent on the time frame when the cost is measured. For the first two years, the SaaS solution is generally less expensive, but beyond the two years, the on-premises solution may be less expensive,” the research reads.

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