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Different Wavelengths: SMBs, Change, and SaaS Adoption
Document: SSR-510
Date of
Publication:
September 30, 2008
Number of Pages:
22
Lead Author(s):
B. Guptill
Contributing Author(s): M. West, B. McNee
Price: $995.00 USD
(Single User License)
Report Overview:
Software-as-a-Service (SaaS) is often touted by SaaS providers and others as a key competitive advantage for small and mid-sized businesses (SMBs) worldwide. The most aggressive adopters of SaaS in most markets are found within SMB ranks.
Unfortunately, SaaS providers’ approaches and offerings too often fail to resonate with SMB executives. Providers tend to focus on business advantages more germane to larger firms; or they fail to perceive important differences in SaaS awareness and buying based on key sub-categories of
SMB.
Meanwhile, SMB executives are increasingly caught in a pattern of aggressive SaaS adoption activity without strategic or tactical plans. As a result, many if not most SMBs today could soon face expensive, and even prohibitive, integration requirements to link disparate SaaS solutions together and with on-premise systems. But an emerging generation of SMBs are more likely to use SaaS – and its close cousin, cloud computing – to cost-effectively outpace their peers.
Saugatuck’s new study of SMB SaaS acquisition, adoption, and management focuses on the business and technological challenges that are unique to smaller firms, and how these translate to business value for SMBs and for SaaS providers. The study examines and illustrates important differences in SMB SaaS adoption and use by company size, and by company age. And the study provides guidance to SMB executives for cost-effective SaaS management, as well as insights for SaaS providers on how to deliver real value to different types of SMB customers.
This report includes data and analysis from over 200 SMB executives worldwide, insights on SaaS challenges from interviews with 20 SMB business and IT executives, and approaches to SMB SaaS sales and marketing from more than 30 SaaS providers.
At the bottom line, SaaS is about business. And the smaller the firm, the more likely it is that what you don’t know will hurt your
business.
Press Release / Media, BLOG and Podcast Coverage:
Executive Summary:
Different Wavelengths:
SMBs, Change, and SaaS Adoption
(Freely available. Registration Required)
Read this report to learn:
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How SMBs are approaching and adopting SaaS – and why, in many cases, they aren’t. Where’s the SaaS business value for smaller firms today, and
tomorrow? |
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The most important differences between the business and technological challenges faced by SMBs, and by larger enterprises. Why, where, when, and how does SaaS need to be different for smaller firms? |
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How SMB SaaS adoption and usage differs not only from large firms, but within the SMB class itself. Learn important and useful insights regarding size-based SaaS adoption trends within SMBs. |
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How an emerging class of “new” SMBs will leapfrog their established peers using SaaS and cloud computing for core IT infrastructure and business
operations. |
Research Highlights:
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There are clear delineations within the overall SMB class when it comes to SaaS adoption, usage, and value. Saugatuck sees three basic groups of SMBs based on SaaS behavior and preferences:
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Small
(Under 100 employees) |
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Low Mid-sized (100 to 499 employees) |
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High Mid-sized (500 to 999 employees) |
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The rankings of what user executives expect to gain from SaaS do not vary widely according to company size. |
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Next-generation technologies are of relatively low interest to SMBs as a whole. |
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For all sizes of firms, SaaS is more likely to enable new and better capabilities and functions than to replace existing applications and IT functions. |
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While SMBs, especially Low-Mids, are among the most aggressive adopters and users of SaaS, SMBs of all sizes are actually doing less with SaaS than larger firms are. |
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Even with aggressive use and high satisfaction, the Low-Mid group indicates the greatest percentage of firms having no plans to use SaaS (25%) – significantly higher than the largest and smallest
firms. |
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When it comes to the most important Technological considerations in selecting SaaS providers, Low-Mids (100 to 499 employees) stand out as having a much broader set of technological considerations when compared to their Small (under 100 employees) and high-end Mid-sized (500 – 999 employees)
peers. |
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The manner in which SaaS solutions are acquired has changed significantly from 2007 to 2008. We see an increasing trend away from collaborative business+IT review of SaaS acquisition cases, and an increasing focus on IT-specific and business-specific review and approval.
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SMBs are much more likely to emphasize business user/executive case review and approval. |
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About The Research:
The research for this report was developed as part of Saugatuck’s ongoing SaaS user research programs. Saugatuck conducts primary research survey, briefing and interview programs as an integral part of our IT market and strategy consultancy practice.
Since 2002, Saugatuck has performed a series of user executive and vendor executive research programs, including web-based surveys, telephone interviews, and briefings, on the most disruptive and influential IT developments in the marketplace, including: IT Virtualization, Cloud Computing, Software-as-a-Service, and Open Source software. In addition, Saugatuck annually surveys more than 500 business and IT executives as part of its annual user IT trends research program.
Our first 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 third such research program.
The core data for this report were developed from Saugatuck’s 2008 SaaS web survey program, conducted from January through March 2008.
A total of 420 qualified respondents, approximately half of whom were from small and mid-sized firms, were included.
Table Of Contents:
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Saugatuck Planning Positions (SPPs) |
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Introduction |
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The Four Waves of Saas
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Wave I: Cost-effective Software Delivery |
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Wave II: Integrated Business Solutions |
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Wave III : Workflow-enabled Business Transformation |
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Next Wave: Cloud Computing |
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SMBs: Three Ways to Ride the Waves
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The SMB Majority, 2008 - 2012. |
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The SMB Minority, 2008 – 2012. |
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The New SMB, 2008 –
Beyond |
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Underneath the Waves: The Rise of Low-Mid Firms
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SMB Enterprise Business Applications Adoption |
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Collaboration is Key |
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Summary: The SMB Realities of SaaS
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Small and High-Mid firms: Why the Differences? |
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Guidance for Users |
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Guidance for Vendors |
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Appendix A: User Research |
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Appendix B: Vendor Research |
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Appendix C: Research Highlights |
List of Figures and Sidebars:
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Figure 1: From Waves to the Cloud: Four Stages of SaaS Evolution |
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Figure 2: Three SMB Groups Riding Four
Waves |
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Figure 3: SaaS Adoption Stages by Company
Size |
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Figure 4: Core SaaS Usage by Company Size |
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Figure 5: Collaborative SaaS Application Use and
Plans |
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SIDEBAR: SaaS (Dis)satisfaction and Small
Firms |
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SIDEBAR: Standard SaaS Acquisition
Practices |
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Figure 6: SaaS Acquisition Practices, 2007 -
2008 |
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Figure 7: Profiling SMBs and Larger Firms |
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