SaaS gains regional acceptance

Software-as-a-Service solutions offer many benefits to organisations, but uptake in the region has been somewhat slow, and limited mainly to larger enterprises.

Tags: Cloud computingDLA PiperFocus Softnet LimitedGartner IncorporationMicrosoft CorporationSAP
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SaaS gains regional acceptance Software-as-a-Service is one of the more popular models of cloud computing, but it has taken some time to gain much acceptance regionally.
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By  Keri Allan Published  February 19, 2014

Software-as-a-Service solutions offer many benefits to organisations, but uptake in the region has been somewhat slow, and limited mainly to larger enterprises. The SaaS market is picking up however, and the model can have a big impact on a business, if the IT organisation understands the complexities of the model.

Software-as-a-Service (SaaS) is one of the most appealing models of cloud computing, allowing companies to instantly access applications with little more than a credit card and a web browser. Regional adoption of SaaS is set to grow, with Gartner predicting that the market will reach $271m by 2017, however, uptake is currently slow. Although there have been some major adoptions in pockets of the region, there are still many obstacles to overcome including preconceptions and security fears.

“SaaS adoption in the Middle East has been slow as there have been very few players hosting them locally. But as more and more hosting happens adoption of public SaaS will surely grow. But due to lot of misperceptions about security, safety, compliance, regulations and privacy, the adoption will be much slower compared to rest of the world,” explains Biswajeet Mahapatra, research director, Gartner.

Awareness and demand is growing, with countries such as the UAE and Saudi Arabia leading the way. Early adopters have come from a variety of sectors such as education, hospitality, finance, telcos and travel — the majority of which have been middle to higher-level enterprises.

“The leaders in adoption of SaaS solutions have been the large enterprises as it lowers the risk when it comes to having software solutions implemented which have higher costs when procured in the traditional way since it involves capital expenditure,” says Kannan Srinivasan, pre-sales manager CRM, Sage Middle East. “The other reason large enterprises consider SaaS is around the speed at which an application needs to be integrated into their ecosystem, with the SaaS delivery model large enterprises are able to start using the application within a very quick time frame.”

Interest is now rising from SMEs but Focus Softnet’s CEO Ali Hyder believes slow uptake may also be due to infrastructure and initial costs being higher for SMEs in the region than elsewhere.

The majority of vendors are offering SaaS versions of their solutions to customers across the Middle East as they firmly believe in cloud and are investing and innovating accordingly. Certain offerings are clearly more popular than others including CRM, storage, HR management and collaborative solutions. Uptake in human capital management and procurement has created solid growth in the region for SAP and Microsoft has seen SharePoint and Lync Exchange being their most widely used SaaS solutions in the Middle East.

“A lot of solutions like email, social media, CRM, HRM, accounting, business intelligence and contact centre solutions are proving popular due to the quick turnaround time to start using the system,” says Srinivasan. “All SaaS systems can be used with a simple contract sign up process and the applications can be used as is or can be tailored quickly to address the intricacies of a particular industry or vertical,” he notes.

CIOs are now beginning to see the many benefits of SaaS solutions, which include scalability and agility, lowered maintenance costs, technical support turnaround time and upgrades.

“SaaS brings significant benefit to organisations through flexibility in scaling users (up or down), rapid start and less time-to-value. In addition, it requires smaller upfront investments, smoothes cash outflow and converts CAPEX to OPEX investment. At its core, SaaS provides greater agility to adopt best practice and unlock new routes to innovation and success on the technological cutting edge,” notes Deniz Kilyar, head of Line of Business and Mobility Solutions Sales, SAP MENA.

“Capitalising on the cloud, SaaS applications are expected to take advantage of the benefits of centralisation through a single-instance, multi-tenant architecture, and to provide a feature-rich experience competitive with comparable onsite applications,” says Samer Abu-Ltaif, Regional general manager, Microsoft Gulf.

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