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3 minutes reading time (568 words)

SMB SaaS adoption correlation with IT resources

Techaisle’s SMB & Midmarket SaaS adoption trends study shows that 30% of SMBs are using less than 5 SaaS categories and 42% are using between 5-10 SaaS categories and balance 28% are using 11 or more SaaS categories. Firms with fewer than five SaaS applications in use mainly consist of relatively smaller businesses and includes a relatively high proportion of firms without internal IT management, and a relatively low number of internal staff members. It goes on to indicate that there’s no direct correlation between managed IT environments, number of IT staff and the number of SaaS applications in use.

However, data provides a basis for seeing SaaS application adoption as a function of IT budget. Working with these statistics, it appears that initial adopters provision one SaaS application category per every $45K-$60K in IT budget. Once these organizations gain experience with SaaS (deploying more than four SaaS application categories), the pace of adoption quickens: businesses report an additional SaaS application for each $40K-$50K in IT budget until they reach 10 installed application categories, at which point the pace of adoption increases again, with one new application added for each $30,000 or so in IT budget.

It will be fascinating to see how these figures change moving forward. Techaisle’s internal forecasts call for relatively measured top-line IT budget growth, but an accelerating shift of resources from conventional IT to XaaS. This underlying shift should have the effect of reducing the dollar thresholds outlined above, and further accelerating SaaS adoption vs. available IT budget.

Techaisle survey data also shows that SaaS solution adoption is highest within the SMBs where IT has a voice on the Board and/or works together with senior executives. This goes hand-in-hand in some of challenges in accelerating SaaS adoption – the challenge of buy-in by senior executives.

Drilling down into the research provides another fascinating view on the status of SaaS within companies at different levels of organizational IT maturity. Techaisle divided the SMB buyers into three groups: companies where IT is seen strictly as a cost, one where IT has a position of influence within the business, and a third where IT is active in helping to drive the business forward. The “IT helps drive the direction of the business” segment and the “IT investments are perceived as a cost center” segments are prominent within the group of companies that has adopted less than 5 SaaS application categories, suggesting that initial deploys are often focused either on strategic outcomes (obtain new capabilities to advance business objectives) or, in roughly one-third of cases, positioned as a cost-cutting strategy.

Use of SaaS as a means of reducing IT costs is evident in the group of companies using 5-10 SaaS application categories. As companies move beyond 10 SaaS applications, however, SaaS itself appears to become more strategic. The more advanced segments, and notably the one that helps drive business strategy, are heavily represented in the group of companies using 11-15 SaaS applications, indicating that there is opportunity for marketing messages emphasizing that experience with SaaS can support new strategic directions. Similarly, the “IT staff has a voice” segment is predominant in the group using more than 15 SaaS applications – indicating that there may also be scope for marketing messages that couple SaaS (and especially, it’s ability to provide rapid, highly-targeted systems for discrete business requirements) as the preferred means of delivering support to an evolving business.

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