IT StrategyRaj Sheelvant’s blog on harnessing Information Technology to create and sustain competitive advantage for the businesses

SaaS IT Management Tools

Forrester Research reports that currently SaaS-based IT management tools accounts for about 1% of the $18 billion IT management software market.  But that is about to change and SaaS is set to account for 10% of the IT Management Software market by 2013.  It’s not just the small or start-up companies but there is surprising high level of interest by the medium sized and large companies.

According to executive summary for the report by Forrester Research ‘How Big Is SaaS In IT Management Software?’, software-as-a-service (SaaS) is disrupting the IT management software market. Incumbent software vendors are setting up new business units and adding SaaS offerings to existing portfolios; managed service providers are repositioning their offerings to leverage the trend; and new pure-play SaaS operators are extending their success by taking advantage of product churn in various established vendors’ service and asset management customer bases.  The summary also suggests that Strategy professionals at IT management software vendors should therefore be planning now to compete in this segment in the medium term. Long term, the more general trend toward SaaS will reduce the total IT management software market by cutting the number of enterprise environments to be managed.

I think it’s not prudent to dismiss SaaS as a small-business play. According to Information Week’s Information Management Blog titled ‘Will IT Management Go SaaS?’ which quotes the Forrester’s study places SaaS squarely in the midsize range, with room to go upward. And there’s great appeal to the SaaS model. Traditional premises IT management software deployments are time-consuming and expensive, with significant capital costs. SaaS deployments are cheaper and faster. SaaS products also can get a toehold into the enterprise through departmental deployments.

Over the long run, I think SaaS is a viable disruptive software delivery model that will challenge traditional enterprise applications.

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Thursday, November 20th, 2008 at 12:34 pm and is filed under Business Strategy, IT Strategy, SaaS. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.