There’s increasing profit in those digital clouds.
A growing number of B.C.’s largest software companies are taking advantage of the efficiencies associated with networking online and providing their products to clients using the software-as-a-service (SaaS) model.
A survey of companies for this year’s list of the biggest software companies found that nearly 90% already use online or network storage for their company files.
Nearly two-thirds are providing a SaaS option for their products.
“This is definitely a growth market,” said SAP Canada spokesman Dorit Shackleton, “and it’s only in its infancy.”
The move is part of a global trend in which a growing number of companies and individual users accept the use of programs and services that are owned, delivered or managed remotely. Ease of use, affordability and scalability are some of the features that are attractive to potential clients.
A Garner Inc. study suggests the market for SaaS products worldwide will grow substantially faster than traditional application markets, having an annual compounded growth rate of 15.3% between now and 2014. It estimated that global SaaS revenue within the enterprise application software market grew to $8.5 billion last year, up from $7.5 billion a year earlier.
For SAP, while most its more than 100,000 corporate customers worldwide use traditional on-site software, the company expects substantial growth in its Business ByDesign SaaS offering, which is targeted at small and medium-sized businesses. After its full launch last July, Shackleton said the company expects to quadruple its number of users by the end of the year to 1,000 from the current 250.
Despite growth in the market, Shackleton noted that companies still have security concerns about putting all their data in “the cloud.”
“What we’re saying,” Shackleton said, “is that there is a place for ‘on-demand’ [SaaS] and a place for ‘on-premise’ [software models]. We don’t think it’s a cloud-only world.”
However, the other value of harnessing the Internet’s data storage capacity is growing interaction and transparency with users and the general public via social media.
In addition to having a Facebook page for each of SAP’s different programs, it also interacts through Twitter and from its own community network of users, developers and other customers.
Said Shackleton, “It’s helped us provide better, real-time communication that’s very transparent.”
87% use online or network storage for company files
87% are already using social media
65% of the biggest software companies in B.C. employ the SaaS model