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An Endless Cycle of Innovation: Saugatuck SaaS Scenarios Through 2014

Document:                        SSR-634
Date of Publication:            August 27, 2009
Number of Pages:              28
Lead Author(s):                 B. Guptill, B. McNee
Contributing Author(s):       C. Burns, M. Koenig and M. West
Price:                               $1,295.00 USD (Single User License)


Software-as-a-service (SaaS) is changing the fundamentals of business for user companies and for SaaS providers themselves. These changes are part of a multi-year “loop” cycle that reciprocates between users and providers, with each side influencing the other in unforeseen ways.

Mismanaging this “endless loop of innovation” will prevent user firms from being able to derive real competitive advantage from SaaS, prevent SaaS providers from competing on an increasingly global stage, and trap ISVs from growing along with the global user IT market.

Understanding how each side influences the others, and how to manage it effectively through changing market scenarios, is the key theme of “An Endless Cycle of Innovation: Saugatuck SaaS Scenarios Through 2014,” the latest and most ambitious global research report developed by Saugatuck Technology Inc.

This report includes analysis, insights and guidance developed from Saugatuck’s fourth annual SaaS research program, which was comprised of a web survey including 1,788 qualified user enterprise executives; interviews with 30 user enterprise executives with SaaS experience; and briefings with 25 SaaS vendors/providers.

“The research shows us a combination of changing SaaS acquisition and adoption, both as a result of the global recession, and as a result of the changing nature of SaaS itself. How users do business with SaaS is changing how providers develop and deliver SaaS, and is changing how ISVs and other players will need to compete over the next several years,” according to Saugatuck founder and CEO Bill McNee, one of the study’s lead authors. “Failure to recognize and adapt to these changes will make it extremely difficult, and much more costly than it should be, for anyone to benefit from SaaS.”

Research Summary:

Saugatuck’s research indicates a series of planning positions for users, SaaS providers and ISVs to take into account through 2014. These include the following:

Despite impressive investments in SaaS development and adoption in different parts of the world, SaaS (and Cloud Computing) will not become the primary IT standard and practice by YE 2012. SaaS will instead be primarily an important “agent of change” through this time period.

By YE 2014, however, SaaS (and Cloud Computing) will become integral to infrastructure, business systems, operations and development within all aspects of user firms, with variations in status and roles based on region and business culture.

While SaaS has favored both startups and established firms with a variety of management styles and pocketbooks, the current economic challenges will weed out all but the better-funded and better-managed SaaS providers by YE 2012 (especially those that are not cash-flow positive). 

Press Release / Media, BLOG and Podcast Coverage:

08-30-09 PRaaS, PRocess as a Service: attempt of a definition (Enterprise 2.0)

08-28-09 SaaS systems integration has become easier, companies find (EDL)

08-28-09 Saugatuck releases largest SaaS study to date (SiliconIndia)

08-27-09 Scenarios of Endless Innovation: Saugatuck Releases Largest SaaS Study to Date (Saugatuck Press Release)

Executive Summary:

An Endless Cycle of Innovation: Saugatuck SaaS Scenarios Through 2014
(Freely available. Registration Required)

Read this report to learn:  

Which of five scenario outcomes are the most likely for SaaS users, providers, partners, channels and markets overall? How will these differ from today’s reality, and what should be done today to optimize the ability to succeed in each scenario?

How is SaaS transforming user business capabilities and operations, expanding the ability of IT to innovate throughout the enterprise, and in turn transforming SaaS offerings and providers?

When will SaaS truly begin to form core IT for a majority of user firms, becoming the de facto, “go to” model for user enterprise IT?

What will happen to traditional ISVs, especially as they struggle with limited capital and increased competition from SaaS simultaneously?

Six Years of Saugatuck SaaS Research:

Saugatuck began surveying and analyzing on-demand IT in 2003, publishing our first report on the subject, “Pay-As-You-Go (PAYG) IT: Where's the Business Value?” in April 2004. Our first global, SaaS-specific user executive survey and vendor interview/briefing program was executed in early 2006, with our analysis published in the April 2006 ground-breaking report, “SaaS 2.0: Software-as-a-Service As Next-Gen Business Platform.”

This report represents key analysis and insights developed from our fourth such research program, which was comprised of a web survey including 1,788 qualified user enterprise executives in 23 countries; interviews with 30 user enterprise executives with SaaS experience; and briefings with 25 SaaS vendors/providers.

Table Of Contents: 

Summary and Research Findings

So What?

Strategic Planning Positions (SPPs)

Introduction

SaaS and Business Transformation

SaaS and IT Transformation

Reciprocal Transformation

SaaS Industry Scenarios

User Impact

Vendor Impact

Appendix A: Recent Saugatuck SaaS Research

Appendix B: Research Methodology and Demographics

List of Figures and Sidebars:

Figure 1: Four Waves of SaaS and Cloud

Figure 2: The SaaS Innovation / Transformation Cycle

Figure 3: Business Benefits Expected from SaaS

Figure 4: Business Capabilities Considered in Selection Process

Sidebar: Saugatuck’s Fourth Annual SaaS Survey

Figure 5: The SaaS Innovation Transformation Cycle

Figure 6: SaaS Innovation and Critically vs. Satisfaction

Sidebar: A SaaS Swap-out Trend?

Figure 7: Saugatuck SaaS Scenario through 2012 and 2014

Sidebar: SMBs and Large Enterprise Trends

Figure 8: SME vs. LE SaaS Business App Deployment and Plans through 2011

Related Research:

08-21-09 A Slice of SaaS Data: Business Capabilities in SaaS Solution Selection (R. Exler, B. Guptill, 4 pages, MKT-631, $$$)

08-19-09 Data Breaches Belie Security Concerns Regarding On-Premise vs. SaaS and Cloud (B. Guptill, 2 pages, RA-630)

08-07-09 Investigating Key Beliefs Behind “SaaS Inertia” Among Legacy ISVs (R. McNeill, B.Guptill, 6 pages, MKT-627, $$$)

07-30-09 Collaborative SaaS Insights: Tiers of Deployment Over Time (B. Guptill, 6 pages, MKT-623, $$$)

07-01-09 User Cloud Infrastructure Expectations: Mainstream IT by 2011? (M. West, C. Burns, B. Guptill, 2 pages, RA-610)

06-29-09 SaaS Vendor Partnering: Navigating the Channel (C. Burns, 5 pages, MKT-612, $$$)

06-25-09 Billing Solutions for the Cloud: Monetization or Muddling Through? (M. West, 5 pages, MKT-611, $$$)

06-11-09 SAP Expands Upon its On Demand Strategy (B. McNee, 4 pages, RA-607)

05-29-09 A Slice of SaaS Data: SMB Adoption Plans Grow in AsiaPac & Euro Regions (B. Guptill, 6 pages, MKT-603, $$$)

05-28-09 SaaS Vendors Starting to Feel the Effects of Tough Economy (B. McNee, 5 pages, RA-602)

05-06-09 Saugatuck Readers Survey: SaaS and Cloud Reign Supreme (B. McNee, 3 pages, RA-596)

04-30-09 SaaS Channel Research, Part 2: How Can ISV Channel Partners Differentiate in the Brave New SaaS/Cloud World? (M. Koenig, M. West, 5 pages, MKT-593, $$$)

04-30-09 Safety First: SaaS Survey Shows Data Concerns Rule (C. Burns, 5 pages, MKT-592, $$$)

04-29-09 HP’s EDS and Microsoft Collaborate to Sell Online Collaboration Suite (B. Guptill, M. West, C. Burns, 3 pages, RA-590)

04-17-09 SaaS Channel Research, Part 1: Subtle, Deadly Change for ISV Channel Partners? (M. Koenig, M. West, 5 pages, MKT-588, $$$)

04-15-09 Saugatuck at Cloud Slam ‘09: Boundary-Free Enterprises and Changing Business (M. West, 2 pages, RA-587)

03-24-09 SaaS in the Post-Crash Era: Industry Data Indicate IT Issues Top of Mind (M. West, 5 pages, MKT-576, $$$)

03-04-09 A Slice of SaaS: Worldwide Channel Preferences Show Mainstream Trends (B. Guptill, 3 pages, RA-570)

02-27-09 Hosted Solutions versus Cloud: A Model Approach (C. Burns, 5 pages, STR-569, $$$)

02-17-09 SaaS: The Second S is for Service – Part 2 (R. McNeill, C. Burns, B. McNee, 6 pages, MKT-564, $$$)

02-12-09 SaaS: The Second S is for Service – Part 1 (R. McNeill, C. Burns, 5 pages, MKT-563, $$$)

02-12-09 SaaS in Finance: Mainstream, Growing, and Poised for Growth (B. Guptill, B. McNee, M. West, 3 pages, RA-562)

02-11-09 Great Expectations: SaaS in the Finance Organization (B. McNee, M. West, B. Guptill, M. Koenig, C. Burns,  32 pages, SSR-561, $$$)

01-30-09 CIOs Need Skills to Leverage Disruptive Technologies for Company Gain (B. McNee, S. Medina , B. Guptill, 5 pages, CIO-557, $$$)

01-28-09 India Inc., SaaS and the Cloud: Rethinking Future Market Opportunities (B. McNee, R. McNeill, 3 pages, RA-556)

 
2010 Cloud Bus. Solutions
Model for Cloud IT thru 2014
Cloud Infrastructure
Monetizing the Cloud
SaaS Scenarios Thru 2014
Enterprise Social Computing
Great Expectations
An ISV Cookbook
Open Source Changes
SMBs and SaaS Adoption
Saas Ready – Drill Down
Saas - Ready, or Not
Faces of Virtualization
Open Source SW
SaaS 2.0: Tipping Point
C-Team: Growth
SOA Reality Check
The IT Utility
SaaS 2.0
Outsourcing Transfd
The IT Utility
Pay-as-you-go IT
UC: A Hard Sell

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