Cloud computing has become indispensable for businesses looking to modernize and maximize the technology assets within their organizations. The 451 Alliance’s recent IT Spending survey, completed in September, looked at the current state of cloud-based software-as-a-service (SaaS) usage within respondent companies.
Focusing solely on US participants, the survey finds almost two-thirds (63%) of respondent companies indicating one or more of their business processes utilizes cloud-based SaaS. Among respondents who use each of these types of technologies, collaboration (82%) has the highest percentage of those leveraging cloud-based software like Microsoft Teams or Zoom. Customer relationship management (CRM; 66%), office productivity (63%) and digital marketing (61%) are the only other business processes where more than half of users say they leverage cloud-based software tools.
At the other end of the spectrum, firewalls (54%) and accounting/expense management (53%) are the only processes where more than half of users leverage locally installed software solutions. This is likely due to security concerns over deploying these processes on an external system.
In fact, across all respondents, the number one obstacle to implementing these types of cloud-based subscription services are security/compliance concerns (34%). Cost (30%) is the next largest obstacle to overcome. And to lesser degrees, skills shortages (18%) and complexity of cloud-based technology (17%) are also hinderances to some organizations.
Importantly, on the whole, we’re seeing a similar level of cloud-based software solutions adopted across both large and small organizations. This shows how SaaS holds value for organizations of all sizes, as long as they can get past any of the internal hurdles discussed above.
With that said, the positives do appear to outweigh the negatives. Among respondent companies that currently use cloud-based SaaS, the enablement of mobility/remote work (53%) has been the biggest benefit to their organizations. The ease with which the solutions are scalable (47%) is also a top benefit. Additionally, there is a second tier of benefits clustered together with business continuity (40%), increased workforce efficiency (40%) and lower operational costs (39%), all rating high as well.
Looking ahead over the next 12 months, more than one-third of respondents plan to significantly (6%) or slightly (31%) increase their spending on cloud-based subscription services, while only 4% plan to decrease. This is a sign of the continued importance of cloud services in the development and modernization of multiple business processes. Storage and backup (57%), office productivity (53%) and collaboration (52%) are the main areas organizations plan to increase spending over the next 12 months, along with customer relation management (CRM; 49%).
As with other areas of spending, the survey found a higher percentage of larger enterprises (>250 employees; 42%) plan to increase spending on SaaS compared to smaller organizations (<250 employees; 36%). This is still a strong showing for smaller companies, and further strengthens the argument that cloud-based SaaS is beneficial to organizations of all sizes.
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