NEW YORK - (Business Wire) Among U.S. small (SBs, 1-99 employees) and medium businesses (MBs, 100-999 employees), SaaS adoption is rising steadily. 21% and 31% of SBs and MBs currently use SaaS solutions, which is double the percentage of adoption in 2004. Spurred by the need for easy to use, implement and maintain IT solutions and limited infrastructure and IT resources, and fueled by growing choice and solution availability, SaaS is gaining popularity in the SMB market.
According to Access Markets International (AMI) Partners, Inc.’s 2008 U.S. Small and Medium Business Applications & Solutions Market Overview, SaaS penetration and spending in the MB sector is significantly outpacing penetration among SBs. Across the board, MBs spend an average of six times more than SBs on SaaS annually, and are twice as likely as SBs to report a planned increase in SaaS spending for the next twelve months. The largest MBs—those with 500-999 employees—report the highest in annual SaaS spending among all SMB size segments.
While SaaS is growing among SMBs, it has yet to reach the mainstream. “The recent growth in SaaS is partly due to the growing number and variety of SaaS offerings both established IT vendors such as Microsoft, SAP, IBM, Google and saleforce.com, which underscores the viability of SaaS,” said Sau Lam, Business Applications & Solutions Analyst at AMI-Partners. In addition, a bevy of newer SaaS vendors, such as NetBooks, Longjump and Coghead, are creating more solutions designed specifically for SMBs.
“But, more work is required to propel SaaS to the next level of growth. SaaS vendors need to intensify campaigns to educate and spark interest among SMBs that are not yet considering SaaS, identify other needs that existing customers have and develop and partner to extend their offerings to increase share of wallet. In addition, they need to build channel programs with partners that can persuade SMBs that are not yet considering SaaS to give it a serious look.”
As part of a comprehensive view of SMB business application and solution adoption patterns and plans, this report also examines other key SaaS trends, such as differences in the types of SaaS applications that SMBs are adopting and plan to adopt in the next twelve months. For example, the top three SaaS applications currently used by SBs include banking/finance, instant messaging (IM) and payroll processing, while payroll processing, banking/finance and human resources management lead in the MB segment. Meanwhile, both SMBs show strongest interest in using SaaS for collaborative and business intelligence solutions in the next 12 months.
About the Report
Based on AMI’s 2007-2008 U.S. Small and Medium Business end-user surveys, the 2008 U.S. Small and Medium Business Applications & Solutions Market Overview, authored by Sau Lam, Industry Analyst, and Laurie McCabe, VP, SMB Insights and Solutions, details these and other major trends and spending forecasts across a spectrum of business solution areas—including accounting, CRM and ERP/SCM—and for related areas, including Internet solutions, and IT and business process outsourcing services. In addition, the report provides key related data, such as SMB demographics and attitudes, and trends in channels and purchasing behaviors. Findings are presented granularly, with data broken out by employee size (1-4, 5-9, 10-19, 20-49, 50-99, 100-249, 250-499, and 500—999), and by vertical industries (AMTUC, Manufacturing, Wholesale, Retail, FIRE, Professional Business Services and Other Services).
For more information about this study, AMI-Partners, or our global SMB research, call 212-944-5100, e-mail ask_ami@ami-partners.com, or visit us at www.ami-partners.com.
About Access Markets International (AMI) Partners, Inc.
AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence — with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and “go-to-market” solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.
AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.
AMI-Partners
Quoted Analyst:
Sau Lam, 212 944 5100 ext 531
slam@ami-partners.com
or
Media Relations:
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Nancy Carty, 212 944 5100 ext 581
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Claudia Jachtmann, (44) 208 987 2756
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Diana Ng, (65) 6220 5535 ext 110
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In India (Kolkata):
Dipendra Mitra, (91) 33 4003 3093 ext 205
dmitra@ami-partners.com
