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News Release from: Datamonitor
Edited by the Manufacturingtalk Editorial
Team on 20 May 2008
SaaS technology benefits SME IT upgrades
Independent market analyst Datamonitor has examined the drivers associated with SaaS technology used by SMEs, which ease IT upgrades and provide access to the latest functionality.
Independent market analyst Datamonitor's report, 'Delivering Software as a Service to Manufacturing Companies', examines the drivers associated with SaaS technology solutions Of the 150 enterprises surveyed by Datamonitor in North America, Europe and Asia-Pacific, the most common benefit associated with SaaS solutions was the easing of IT upgrades and providing access to the latest functionality
This article was originally published on Manufacturingtalk on 19 Feb 2007 at 8.00am (UK)
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Manufacturing technology senior analyst and author of the study, Adam Jura, said: "SaaS has largely been driven by adoption of customer-centric technology such as sales force automation, however the appeal of the delivery model is widening within manufacturing companies as IT budget outlooks start to look grim".
He added: "As service providers shift away from traditional application service provider (ASP) models, the associated cost savings of multi-tenancy solutions can often be passed on to end-users.
This makes investment in technology delivered via SaaS an increasingly attractive proposition".
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* Service level and security concerns remain the biggest inhibitors for SaaS adoption within enterprise manufacturing companies - one surprising aspect of the primary research conducted for the study was the high importance still being attributed to security concerns by manufacturing companies.
Because SaaS solutions are typically delivered from an off-site location, key data is often out of the direct control of manufacturing companies.
This information could be mission-critical, such as financials, customer lists and product data.
Therefore, manufacturers are worried about whether their data will be kept fully secure.
Interestingly, said Datamonitor, vendors have been spending considerable effort to allay these fears.
Obviously, more still needs to be done.
* Affordable alternatives for SMEs - Datamonitor believes that while the above features were based on interviews with enterprise manufacturing companies, the same can be said for the SME market.
For these companies, SaaS solutions can provide affordable alternatives to on-site technology that may be more formulated towards larger firms.
Trying to provide a flexible IT environment for quick business growth is critical for SMEs as they seek to expand their operations, said Datamonitor.
Jura said: "The SME and enterprise manufacturing industries are unsurprisingly rather different when it comes to current and potential adoption of SaaS technology solutions.
Within SME companies, the range of processes supported is significantly higher as vendors like SAP bring more suite-oriented solutions to market".
He continued: "At the enterprise level, processes such as customer interaction and human capital management are more appealing for SaaS with other areas such as manufacturing operations management significantly less so".
* Vendors still have some way to go before gaining the most out of the growing SaaS market - Datamonitor told manufacturingtalk that the SaaS market holds considerable challenge for vendors wishing to increase revenues and market share.
Core to the decisions taken by these vendors is the question of which of their existing on-site technology to enable for SaaS delivery.
Vendors will need to be sure of their selection given the potentially costly modification of their code base for transformation into a SaaS solution.
Datamonitor believed that the enterprise market has not yet seen a winning vendor for SaaS.
Some companies such as Salesforce.com and RightNow have made significant progress.
In Datamonitor's opinion, this represents only a small portion of the wider potential SaaS market.
Those vendors that can adapt their 'go-to-market' and product strategies to take advantage of the current demand for SaaS will reap the rewards of their efforts, said Datamonitor.
Jura said: "Ultimately, SaaS itself is only a delivery model for technology solutions.
Vendors will need to be able to offer their manufacturing clients a choice based on the unique circumstances of the engagement".
He concluded: "What will be vital in attracting manufacturing companies to a SaaS solution is taking such a delivery model seriously.
That means developing significant configuration options, creating templates that allow for regional or industry specificities, and providing appropriate service levels and security".
* About Datamonitor - Datamonitor is the world's leading provider of online data, analytic and forecasting platforms for key vertical sectors.
We help our clients, 5,000 of the world's leading companies profit from better, more timely decisions.
Through our proprietary databases and wealth of expertise, we provide clients with unbiased expert analysis and in-depth forecasts for seven industry sectors: Automotive and Logistics, Consumer Markets, Energy, Financial Services, Healthcare, Retail and Technology.
Datamonitor maintains its headquarters in London and has regional offices in Frankfurt, New York, San Francisco and Sydney.
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