SMBs Hungry For SaaS: Study


SMBs that want to save some scratch are eyeing Software-as-a-Service (SaaS) solutions and more than 4.2 million SMBs want to get aboard the SaaS train, AMI said in a recent report.

Currently, about 12 percent of small business and 24 percent of medium businesses use SaaS, but the vast majority – 78 percent small and 31 percent medium businesses – use an on-premise or hybrid SaaS model and only about a third use pure-SaaS.

But according to AMI, that is expected to change as SMBs bump up their cloud adoption plans and make the transition from on-premise to on-demand, a market that's expected to balloon to more than $95 billion by 2014. AMI said more than half of U.S. SMBs are looking to SaaS as a potential solution, with one in every five SMBs planning to use SaaS. AMI said that SMBs are easing into the concept of local plus cloud-based computing rather than leapfrogging into a pure-play platform.

"Though cloud computing is seen as the next IT platform, the consideration of SaaS amongst SMBs as the next favorable cost-saving model is expedited by the macro situation we are in today," AMI Senior Associate Yedda Chew said in a statement.

According to Chew, 77 percent of U.S. small businesses of one to 99 employees and 84 percent of U.S. medium businesses of more than 100 employees are still concerned with current market conditions, even two years since the economic downturn began.

"In addition to this, SMBs have their doubts, particularly around the security of a third party hosting confidential numbers. Plus, companies like Microsoft and IBM which provide a convergence of on-premise and SaaS are clearing these concerns for interested SMBs who are trying to maximize the combination of cloud and on-premise issues."

AMI noted that e-mail and messaging is one of the key applications that will fuel the need for on-demand and cloud computing among SMBs. Roughly 134,000 of non-SaaS U.S. SMB users plan to adopt e-mail and messaging, which will create an ecosystem of co-existence between hosted, online and on-premise solutions, which will eventually lead to the migration to cloud-based e-mail.

Additionally, online storage and backup will help SMBs make the move to the cloud. AMI said that 129,000 non-SaaS U.S. SMBs plan to adopt online storage and backup.

Lastly, document management and collaboration will accelerate the need for cloud and SaaS solutions among SMBs, AMI said.

The trio of applications, plus the dawning of budget season for SMBs, means there are opportunities for solution providers to engage their SMB clients with solutions from Microsoft, SAP and IBM to offer mixed local and cloud-integrated solutions as SaaS takes hold.

"These companies are enjoying the SaaS tailwind, and it will be these companies with their hybrid model, which have a better chance of breaking down the barriers of the potential 5.7 million non-SaaS US SMB users," Chew said.