While the terminology has advanced from 'ASP' (Application Service Provider) to 'on-demand' to 'hosted applications' to 'Software as a Service' (SaaS) to the current moniker of 'cloud computing', the concept of consuming customer relationship management software systems delivered over the Web based on a subscription pricing model continues to achieve double digit market growth and be the top agenda item on the CIO's review list. Now with fever pitch hype and media, IT buyers want clear explanation, lessons learned and measurable benefits when evaluating the decision to outsource their IT responsibilities.
CRM Software In The Cloud
Cloud computing is a method of information technology consumption in which dynamically scalable and often virtualized resources are provided as a service over the Internet based on a subscription pricing model. Cloud benefits include accelerated deployment, on-demand scalability, predictable expenditures, lower total cost of ownership and increased focus on core competencies.
Cloud Computing Thought Leaders In Their Own Words
Michael Fauscette, Director of IDC's Software Business Solutions Group, shares research data, statistics and insight that demonstrate the factors that most influence cloud adoption by market segment and business benefit—and how IaaS, PaaS and SaaS are evolving to deliver new decision and relationship value to historically transactional business systems. Michael Fauscette podcast ...
Martin Schneider, Research Manager of Enterprise Software for 451 Research, shares why CRM systems have pioneered the enterprise software movement to the cloud, and why other applications such as ERP and HCM are following in large numbers. He also discusses key cloud factors such as security, SLAs, portability, online marketplaces and vendor lock-in. Martin Schneider podcast ...
The 7 Deadly Sins of SaaS CRM
With SaaS CRM continued growth comes continued challenges. Cloud security threats remain a lingering concern for many, user adoption challenges have shifted but remain a change management struggle, well publicized CRM implementation failure rates continue and customer churn among some SaaS vendors is unacceptably high. These are but a few examples of the risks that accompany SaaS CRM solutions. This white paper examines 7 SaaS CRM threats and missed opportunities and suggests mitigating strategies for each. Read The 7 Deadly Sins of SaaS CRM »
Lars Dalgaard used SAPPHIRE NOW to articulate the company's go-forward cloud strategy. The strategy emphasized a plan to modularize or deliver cloud apps a la carte—which is seemingly the opposite of the Business ByDesign value proposition. Here's why ByDesign has failed to launch and how that failure is masking the biggest cloud opportunity facing SAP.
Oracle's Exalogic Elastic Cloud promises reduced costs through improved simplicity and pre-packaged integration among hardware, platform software and business apps. NetSuite has standardized on it while Salesforce.com's Marc Benioff laments it. In this review we look at the promises and potential for Exalogic to impact the CRM and business apps landscape.
As part of his presentation at Gitex Dubai, CRMsearch blogger Chuck Schaeffer delivered "The Risks and Rewards of Software as a Service CRM" as a decision framework for business executives and IT buyers to compare and contrast the most salient factors and differences of on-premise and on-demand customer relationship management systems.
Rick compares the IT acceptance and market growth of cloud computing while breaking out cloud layers such as software as a service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). Putting aside the market hype, there is plenty of opportunity and due diligence for business and IT buyers considering a cloud computing strategy.
Just the thought of security breaches can cause executives to shudder, and approach cloud computing with great trepidation. However, to truly understand the information security exposure and risks associated with the cloud, a deeper examination is required. Here we flush out the facts and analyze the pros and cons of cloud security.
Cloud computing and SaaS continue their upward market trajectory, however, are clearly not suitable for all companies. Referencing research from analyst firm Info-Tech, this article identifies the specific criteria to help determine whether on premise customer relationship management software or SaaS CRM is better suited to your company's objectives.
IDC forecasts that one-third of all digital information will pass through the cloud by 2020. Cloud computing continues a natural evolution from in-house data centers and the prior era of shared computing services, however, with new benefits in the forms of flexible contracts, utility based billing, self provisioning of services, on-demand scalability and cost savings.
Cloud Computing News & Views
"The Cloud Changes Everything - Still"
Competitive Advantage in the Cloud
Nucleus Research poetically reaffirms "cloud is cheap, cloud is green, cloud is a marketing machine" and predicts more competition and more innovative upstart vendors. Go To ...
While SaaS and Cloud Computing are gaining traction in the enterprise market, many firms still struggle to understand their strategic implications. Go To ...
2010: The Year the Cloud Rolled In
Cloud Computing in Top 10 for 2011
Corporate computing has gone through 3 prior phases. The digital economy passed a tipping point and moved into a new age of technology use, the Cloud Era. Go To ...
Gartner analyst David Cearley notes the cloud is changing in scope and services. From mass market SaaS CRM to mass adoption of IaaS to PaaS. Go To ...
Private Clouds Forecasted For Big Growth
According to the IDC report titled 'Worldwide Enterprise Server Cloud Computing 2010 to 2014', the analyst firm predicts server revenues driven by the accelerating private-cloud market will grow from $2.6 billion to $5.7 billion in 2014. IDC also forecasts total private cloud revenues will grow by 61.6% to $11.8 billion in 2014.
IDC Survey Shows 'SaaS on a Tear'
According to late 2010 IDC research, Software as a Service is on "a tear" with revenue set to grow at six times faster than all software and SaaS expected to show compound annual growth (CAGR) of about 26% up to 2014. "Software will never be the same again" said IDC's Robert Mahowald, announcing the results during an IDC webinar. The research survey also illustrated that the perpetual software license market suffered a fall of $7 billion in 2009. The report, Worldwide Software as a Service 2010-2014 Forecast: Software Will Never Be the Same, also revealed that Enterprise Resource Planning (ERP) software projects would be particularly hard hit with ERP upgrades being delayed or cancelled and with CAGR expected to be just 5%. The IDC research found that most SaaS is being delivered to US companies, which currently have 71% of the cloud computing market, but by 2014, SaaS adoption will become more global. Despite this aggressive pace toward SaaS, IDC found that 26% of companies were still resistant to cloud computing, saying that had no plans at all for a move to the cloud. This rose to about 40% for companies with fewer than 100 employees.
SaaS Business Software Forecasts Continue to Rise
IDC is projecting a 25% software as a service compound annual growth rate (CAGR) through 2014. The research firm also predicts that the shift to SaaS will extract nearly $7 billion in worldwide license revenues in 2010 alone. By 2014, IDC expects 34% of all new business software systems to be purchased as SaaS solutions.
Infosys Offers SAP Business ByDesign Practice
The lack of a mature channel is a common challenge levied against SAP's software as a service (SaaS) ERP product, Business ByDesign. However, the company's go to market strategy is showing progress as global system integrators develop dedicated practices around the cloud-based business system. Infosys participated in the Business ByDesign software development and is now creating a practice to deliver implementation services and vertical market add-on extensions. It remains to be seen how a tier 1 integrator can accommodate the budget constraints of the SMB market, however, Infosys' leverage of offshore labor is certain to be part of the equation.
Oracle Locally Hosts SaaS CRM Down Under
Oracle will be the first major on-demand CRM provider to serve its software as a service CRM product from an Australian data centre. Partnering with Harbour MSP, Oracle/Siebel On Demand will be delivered from the Global Switch in Ultimo, Sydney. While many cloud pundits suggest it doesn't matter where the data centre resides, latency is a factor when serving Australia from either the U.S. or Europe. Also, Government organisations often prefer the data to reside in the country.
Vantive Media facilitated an interesting conversation, titled Cloud Computing Market Confusion, at www.vantivemedia.com/cloud.asp and another good SaaS discussion at www.vantivemedia.com/saasvalue.asp.
CRMforecast.com/technology.htm provides useful analysis, and correctly points out that cloud computing is far less about new technology and far more about improvements to the acquisition, delivery and support of CRM business systems.
CRMsoftware360.com shares their annual Top 5 cloud computing and SaaS CRM software applications list.
CRMlandmark.com/saasmarket.htm displays an interesting history of SaaS CRM market predictions over the last seven years.
Cloud solutions will be so entrenched by 2012 that 20 percent of businesses worldwide will own no IT assets."
Cloud CRM Market Forecast
IDC forecasts the cloud computing market will grow to $149 billion and that half of all transactions will be executed in the cloud by end of 2014. The research firm also predicts that 80% of new software offerings will be available as cloud services in 2011 and by 2014, more than one-third of software purchases will be via the cloud.
Gartner reports that in 2012, 35% of all CRM implementations use SaaS, and that figure will grow to over 50% by 2020. SaaS-based CRM sales within enterprises are expected to reach $4.48B in 2012, growing to $6.3B in 2015.
Gartner advises that cloud adoption varies significantly across CRM software categories with Web analytics achieving 95% adoption, Sales Force Automation achieving just over 50%, and Configure Price Quote (CPQ) achieving 40%. Sales, Customer Service, Social CRM and Marketing are the four fastest-growing SaaS CRM areas.
Forrester projects the cloud market will reach a quarter of a trillion dollars by 2020.
The TechNavio analyst report, Global SaaS-based Customer Relationship Management Software Market 2011–2014, forecasts the Global SaaS-based CRM software market to grow at a CAGR of 13.5 percent over the period 2011–2014, and further cites increased objectives toward customer centricity and customer experience management as primary factors contributing to SaaS market growth.
In 2010, analyst firm Yankee Group revealed that more than half of U.S. companies now consider cloud computing viable for the enterprise, with favorable views on cloud jumping by more than 50% in the current year. The analyst firm research report stated that "cloud computing is on the cusp of broad enterprise adoption."
In their IDC Reports, the analyst firm predicted SaaS market revenues would grow to $40.5 billion in 2014, from $13.1 billion in 2009.
Gartner projects the cloud market will grow from $91 billion in 2011 to $207 billion by 2016.
Analyst firm IDC defines cloud computing as "an emerging IT development, deployment and delivery model, enabling real-time delivery of products, services and solutions over the Internet." Using this definition, IDC forecasts the cloud computing market will reach $42 billion by 2012.
Gartner describes the cloud as "a style of computing where scalable and elastic IT-enabled capabilities are provided as a service to external clients using Web technologies." Using this definition, Gartner estimates global industry revenue (including online advertising) will grew just over 20% in 2009 to $56.3 billion.
SaaS analyst firm THINKstrategies describes cloud computing as a set of web-based tools and services which permit customers to acquire computing resources and development capabilities to build or support applications, or perform specific IT functions on a pay as you go basis.