Is The Recession Good For SaaS? - InformationWeek

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5/2/2008
02:13 PM
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Is The Recession Good For SaaS?

I heard opposing voices at Interop about whether the bad economy will drive companies to software as a service.

I heard opposing voices at Interop about whether the bad economy will drive companies to software as a service.IT budgets can be precarious in the best of times, and the current economic recession will affect IT's ability to spend. (It's certainly not going to help IT salaries).

While unwelcome, budget restrictions also can be an opportunity for IT to be creative and try new things. At an Interop panel discussion, Philip Winslow, VP and software analyst at Credit Suisse, pointed to SaaS as one option.

As IT is tasked to do more with less, that's an opportunity for SaaS to get a foot in the door. Winslow says Credit Suisse is asking itself "Does our IT shop really need to be in the business of running Exchange?" E-mail isn't a core business of the company, and can be provisioned and managed by a third party.

SaaS is certainly attractive from a capital perspective. As our TCO analysis of a CRM deployment shows, SaaS wins when it comes to saving money on deployment.

But economic bad news also may make IT shops more cautious. That was the opinion of Mike Braun, founder and CEO of Intacct, a SaaS-based provider of financial and accounting apps. In his experience, when times are tight, it's harder to convince customers to move away from their existing apps, even if those apps are causing them pain.

I'd like our readers to chime in. When the financial waters get rough, are you more or less willing to hop into a SaaS boat?

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