Midsize CIOs Increasingly Look For SaaS-Based Applications

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Slowly, surely, more midsize companies are embracing software-as-a-service (SaaS) over traditional software licensing, said CIOs at Everything Channel's Midsize Enterprise Summit in Los Angeles this month.

Several CIOs said they're not ready to permanently eliminate all their traditional licenses, but in this economy SaaS has become a cost-effective way to keep up with the latest applications.

"Two years back, I thought [SaaS] was the stupidest thing. But we've finally started seeing some applications that make sense," said Peter Larsen, manager of information technology at National Frozen Foods, Seattle, Wash.

National Frozen Foods now is looking at some sales applications via SaaS because the cost to upgrade his current business intelligence solution will cost $1 million, which Larsen can't justify because of how often it gets used.

"I'm not going to spend $1 million on a CRM application for seven people, but I will spend $50 a month," Larsen said.

Robert Bence, vice president of technology at SouthwestCredit, Plano, Texas, said he looks for SaaS solutions first if the application is not a core part of the business.

"For a commodity-type application, it makes sense. We allow our spyware, anti-virus in the cloud and we're looking at the possibility of moving e-mail to the cloud. For things like patch management, if we can reduce costs by not having our resources do it, it makes sense," Bence, said.

But some companies said they're not ready to make the SaaS dive just yet.

"It's a buzzword. We're not looking at it right now," said Dirk Anderson, vice president of technology at C.R. England, a Salt Lake City, Utah-based transportation services company.

Russ Tomlinson, information systems manager at Chaparral Energy LLC, Oklahoma City, Okla., said security needs to be tightened before his company will move core business processes to the cloud.

"Give it three years and maybe we'd look at it. Our CEO wants to keep it in-house and I agree. There are two many security lapses in SaaS environments right now," Tomlinson said.

NEXT: Why Some Companies Are Not Making The SaaS Move

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