Latest report reveals growing “SaaS first” attitude among buyers
In its recently released February technology software report [1], investment bank Goldman Sachs finds that 58% of those surveyed now always consider SaaS when making new application purchase decisions. Announcing this phenomenon as a “SaaS first” trend, it describes how a majority of respondents now look to SaaS companies before considering traditional on-premise licensed software.
As someone who has been in the SaaS business for eight years now, I consider this a sea change of extraordinary magnitude—a tipping point, if you will. It signals a shift from SaaS being regarded as a niche product that only fits certain applications or industries to a view that now sees SaaS as a primary mode for application deployment.
The report’s singular phrase that caught the media’s attention—“unstoppable shift to SaaS continues”—indicates another tipping point in the industry; namely, that the sector as a whole will not only survive, but prosper at the expense of older software delivery methods.
While this is certainly welcome news for investors in this sector, it is equally welcome to prospective buyers. It means that it’s no longer a gamble to choose a SaaS solution, and that the variety and competition among providers will continue to increase.
Of particular interest to readers of this blog will be the fact that “security/compliance” software now makes the list of 20 top SaaS applications in the survey. While not a direct hit for physical security per se, it does underscore the increasing confidence that companies are placing in outsourced applications for critical or sensitive corporate functions.
We’ll see more of that next week when we look at why A&S International, the global security magazine, says in its January issues that that “Software-as-a-service (SaaS) is shaking the physical security industry.”
-Steve Van Till
[1] Goldman Sachs, Global Investment Research, February 9, 2010
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