The rise of SaaS, software delivered as a service, is having an enormously disruptive impact on the software industry. Forrester Research estimates that spending on SaaS technology will double by 2013, representing 16% of all software spend. Gartner Research estimates that SaaS software spend is growing at 18%, compounded annually, and will reach $23B by 2015.
At the same time, open source adoption in the enterprise is reaching a tipping point. According to Accenture, 77% of high performance organizations are piloting or committing to open source.
What is driving the rapid ascent of SaaS? Organizations large and small are looking to SaaS applications to reduce costs and simplify software application management. SaaS promises significant operation efficiencies, as IT organizations can offload the complex, expensive processes necessary to manage enterprise applications. Every application requires software and security updates, new capabilities to test and release, along with a web infrastructure to maintain for performance, security and reliability. SaaS provides organizations with a mechanism to reduce their spend on application management, costs that can consume the IT budget.
Many IT organizations spend as much as 70% of their budget on sustaining engineering, keeping their current application portfolio up and running. As a result, investments in new technologies that spur innovation are severely limited, creating a gulf between IT and business leaders focused on achieving company objectives. SaaS-delivered applications represents an opportunity for organizations to adjust their IT spend to better align with their core business strategies and increase technology investments in areas that are directly tied to the organization’s success.
One technology category that is at the forefront of innovation spending is open source technologies. In many application categories, including web content management, cloud, and big data, open source technologies are leading the way. The question, therefore, is can an organization take advantage of both of these trends – SaaS efficiencies and open source innovation – at the same time?
The answer is yes, with OpenSaaS.