June 16, 2010 – While software as a service has re-energized the software market, it does not solve all the challenges of delivery, according to Gartner Research Inc.

However, with more than 95 percent of organizations planning to increase SaaS use, the market research firm highlighted four steps for evaluating its role.

Determine the value of SaaS for your organization. It’s not a pancea, Gartner analysts emphasize. Companies should evaluate and understand the trade-offs: SaaS limits infrastructure overheads and management; it lowers short to medium-term cost of ownership; third-party application tools are limited; and applications cannot be counted as assets on a balance sheet.

The next step is to develop an internal and external SaaS governance model that bridges the business and IT. Organizations drawn to the hype of SaaS often fail to recognize governance problems downstream.

“People were caught up in the initial hype of SaaS and they didn’t really consider the fact that it was not a completely turnkey, out-of–the-box solution,” says Sharon Mertz, research director at Gartner.

SaaS is maturing and, as a result, organizations are beginning to test its limits, says Mertz. Those limits, according to Gartner’s survey of 270 IT and business management professionals, include concerns about a lack of policies governing the evaluation and use of SaaS, but also integration and customization.  

Organizations should be continuously developing an integration roadmap for how SaaS applications will integrate with on-premise applications, according to the Gartner’s list of best practices.

Also, companies should evaluate vendors for specific application needs.

“SaaS changes the role of IT from implementing its own operations to inspecting a vendor’s operations,” David Cearley, vice president and fellow at Gartner was quoted to say.

Click here to read more articles related to SaaS in our Cloud Computing Exchange.

Gary Steele discusses the cloud rush of 2009 in this article and the role that SaaS played. Click here to read “The Great Cloud Rush of 2009.”

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