Most SMBs require the same software capabilities as large enterprises but do not have the resources and in-house technical expertise necessary to manage it themselves. A recent study by the Cutter Consortium finds that many businesses are no longer willing to tolerate the long deployment cycles, ongoing administrative hassles, high operating costs and low ROI associated with traditional, on-premise software.
These factors are fueling the adoption of Software as a Service, which Gartner Research expects will grow from five percent of all business software spending in 2005 to 25 percent in 2011. With its current market penetration and expectations for growth, it is apparent that SaaS is asserting its position within the software industry.
With CRM and SaaS, it's all about actual business results. Purchasing a CRM application as Software as a Service should motivate both the buyer and seller to maximize quantifiable business improvements. The extent to which customers gain business value from SaaS applications drives their level of usage. In turn, the level of usage determines the success of the provider. This is a welcome change from the traditional onsite license model, in which the upfront costs led both parties to put significant effort into justifying the investment, while doing little after a deployment to measure and improve results.
