January 30, 2014 | Written by: Holly Lehr-Hahn
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I caught up with Marc Dietz, director of IBM SaaS Strategy & Marketing, at IBM Connect in Orlando this week to chat about the new IBM Global SaaS Research Study that was published this week.
Marc, I understand this is a big week for IBM’s software-as-a-service business. What can you tell us about the study that was just published by the IBM Center for Applied Insights (CAI) .
In late 2013, the CAI team conducted a comprehensive study about how organizations are leveraging the cloud to accelerate competitive differentiation. In this study, we took a deeper look at how companies are deploying SaaS and what benefits they are realizing. And what we found is that even though reducing costs is the No. 1 motivator for considering SaaS, the more common result is a gain in competitive advantage. In fact, 47% of the business and IT leaders surveyed said they are using SaaS to differentiate themselves in the marketplace.
To better understand how organizations are using SaaS, we segmented enterprises by the level of their SaaS adoption and competitive advantage. The pacesetters, who were 19% of the total, have the highest level of SaaS adoption and are gaining the most advantage. Pacesetters are also mainly driven to adopt SaaS to improve collaboration as well as the customer experience, compared to chasers and challengers, who are primarily motivated by reducing TCO. Regardless of their motives, all three groups are still gaining some advantage in the market.
What did the study find about the relationship between line-of-business (LOB) and IT when it comes to selecting and adopting SaaS solutions?
Another interesting thing we found is while there is a common myth that IT and LOB don’t see eye to eye when it comes to SaaS, the truth is, in leading organizations, SaaS strengthens the IT and LOB relationship. For example, LOB and IT strongly collaborate on SaaS selection and deployment in 70% of Pacesetter organizations. Compared to chasers and challengers, more than twice the number of pacesetters (71%) have a cohesive, enterprise-wide SaaS strategy, and four times more position SaaS as an integral part of their enterprise cloud strategy.
What did the study find about how organizations are using SaaS to gain competitive advantage?
What the study found is that pacesetters are going beyond enterprise efficiency, achieving deeper collaboration, better decision making and market agility. In fact, [inlinetweet prefix=”” tweeter=”” suffix=””]61% of pacesetters say that SaaS has increased both internal and external collaboration[/inlinetweet] and 71% percent of pacesetters credit SaaS for improving business relationships.
Another interesting thing we found is that pacesetters put social tools at the top of their most-favored SaaS applications. These organizations are connecting in the cloud to activate a smarter, more collaborative workforce to drive better business results. For example, SafeGuard World International, a leading provider of global managed payroll, is using a SaaS-based collaboration and social project management solution for knowledge sharing and collaboration among employees, executives and clients. As a result, SafeGuard was able to overcome communication challenges and decrease time to revenue through a 20% reduction in implementation time for many of its projects.
What is the current state of the SaaS market and how does IBM serve this market?
SaaS is a key growth segment within cloud and a focus area for IBM. The SaaS market is forecasted to grow at a CAGR of 21% in 2012-2017, growing from US$17.6 billion in 2012 to US$45.8 billion in 2017.* And according to IDC, 85% of new software is built for the cloud today.** What many people might not realize is that IBM is well positioned to meet the demand of this growing market with more than 100 SaaS solutions, ranging from collaboration and talent management to business analytics to solutions that help you optimize and better coordinate the buying, marketing, selling and service processes.
How can people learn more about the study and what IBM can do to help them take advantage of the benefits of SaaS?
If you’re attending IBM Connect, we will be presenting an in depth look at the study on Thursday, Jan. 30 at 10 a.m. in the Swan Toucan 1 & 2. You can also download the study here or visit the Center for Applied Studies website.
*Source: Gartner Forecast Overview: Public Cloud Services
** IDC Directions: IT Cloud Services at the Crossroads: How IaaS/PaaS/SaaS Business Models are Evolving. March 2013