Study: SaaS Most Important Enterprise Software Trend

According to a recent survey of 850 "enterprise software customers," software-as-a-service (SaaS) continues to be the most important enterprise software trend, followed closely by Web services/service-oriented architecture (SOA), then offshoring/globalization, open source software and software industry consolidation.

The survey, conducted by research firms McKinsey & Company and the Sand Hill Group, asked participants to select "the most important [software] trend impacting your business." 31 percent selected SaaS, up one percent from the last time the firms asked the question in 2006. Web services/SOA also rose 1 percent, from 24 percent to 25 percent.

Offshoring/globalization remained in third place, but dropped two percentage points, from 15 percent to 13 percent. Open source also dropped, from 10 percent to eight percent, as did software industry consolidation, with only seven percent choosing it as their top trend this year, as opposed to 17 percent in 2006.

Participants saw other trends ahead than those listed above, with 16 percent selecting "other" in this year's survey, up from four percent saying so in 2006.

IT budgets are more focused toward subscription/on-demand licenses, the research found, with 19 percent of the average respondent's budget going toward "Subscription/On-Demand" services in 2008.

The amount of money enterprises are expected to spend on software overall is also on the rise, the study stated. The average percentage budget allocated to software rose from 30 percent in 2006 to 32 percent in 2008, according to respondents, and it was expected increase to 35 percent in 2010.

"Despite the economic downturn in the U.S., there is slow but steady growth in software's share of the overall IT budget," the researchers commented in the report. "Survey respondents projected that this growth pace will continue for the next two years, indicating that software plays an ongoing role in delivering business productivity gains."

Respondents were also asked to choose where they think the industry is in its current innovation wave. Sixty-two percent said that it is "on the upswing," while 17 percent said it's "at the peak," five percent said it's "past the peak" and 17 percent picked "What innovation wave?" as their answer.

To download the study in PDF format, click here.

About the Author

Becky Nagel is a contributor to Application Development Trends. She is the editor of ADT's sister sites, and, and is co-editor of You can contact her at [email protected].