September 24, 2010 – The promise of small and mid-sized enterprises rushing to Software-as-a-Service for their tech needs is falling flat, with many hardly aware of Web deployment options.

Saugatuck Technology researchers made that assessment from a new survey of nearly 800 various businesses from around the world. The Connecticut-based strategic advisor split respondents into two categories: small and mid-sized enterprises (SMEs), having fewer than 1,000 employees; and large enterprises (LEs), those with more than 1,000 employees.

From a questionnaire and interviews with the companies, Saugatuck found that 42 percent of SMEs stated they were “still learning” about an approach to adopting SaaS and cloud computing, while 28 percent of LEs had that same response. Twenty-seven percent of small and mid-sized companies do not plan to use a cloud business solution at all, while only 16 percent of big companies said they are avoiding it.  

In total, Saugatuck found that 24 percent of SMEs have or plan to implement SaaS in the near future, though nearly double of LEs have or plan to make the step into SaaS. Large firms topped smaller ones in every statistical category aimed at SaaS deployment in the study.  

A summary of the research concluded that there is no single reason for the gap in implementation by small companies; factors ranged from prohibitive initial costs, to lack of IT depth to overall absence of knowledge about SaaS and cloud options. Overall, Saugatuck remarked that their data “belies the commonly-held belief that SaaS is at its core an SME phenomenon.”  

Researchers noted that the vast number of firms “still learning” about SaaS was “especially daunting, given the massive marketing investment that SME-targeted SaaS business solution providers such as NetSuite and Intacct have already made, among others.” Smaller companies without knowledge of SaaS options often have more to lose than their larger rivals because of lower fiscal overheads and related competitive and oversight disadvantages, the researchers stated.  

However, they note that the growth of SaaS and cloud computing – and the related expansion of marketing by vendors from larger companies to more smaller companies – should bring along awareness and investments for businesses of all sizes.


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