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Survey Shows More Users Willing to Consider Hybrid SaaS

Survey Shows More Users Willing to Consider Hybrid SaaS

SAP's entrance into the market is bound to step up analysis on the part of potential buyers as to which is the better SaaS deployment. More firms will decide they prefer a hybrid approach, Yankee Group Analyst Sheryl Kingstone theorizes, as choices continue to grow and the incumbent vendors improve their applications.

By Erika Morphy
02/03/06 11:51 AM PT

There is greater demand than previously thought for a hybrid software-as-a-service (SaaS) product, suggests a Yankee Group survey scheduled for mid-February release.

To assess sales and marketing effectiveness, Yankee Group, in conjunction with WebSurveyor, recently polled 315 sales and marketing executives. The survey asked participants to give the top reasons for companies to use SaaS.

One question participants were asked was, "Does your organization prefer a hybrid approach -- a combination of SaaS and traditional license model?"

Fifty-one percent of the respondents replied "Maybe," 30 percent said "Yes" and 19 percent said "No," according to Yankee Group Analyst Sheryl Kingstone, who conducted the poll.

Topic of the Day

The large number of firms indicating an interest in a hybrid deployment does not surprise Kingstone, even though that has not been the general perception in the industry. "It is something we have been tracking for two years," she told CRM Buyer.

In part, that is because companies have had few options in this area. On Thursday, SAP released a hybrid CRM hosted application, joining Siebel and RightNow Technologies, which offer their own versions of a hybrid application.

Like Siebel OnDemand, the SAP offering is built on the same data model and business logic as its on-premise application, Kingstone noted. For its part, RightNow offers not only a choice between premise-based and on-demand, but also the option of a multi-version model that allows customers to control the upgrade process.

SAP's entrance into the market is bound to step up analysis on the part of potential buyers as to which is the better SaaS deployment. More firms will decide they prefer a hybrid approach, Kingstone theorizes, as choices continue to grow and the incumbent vendors improve their applications. For example, SAP may need to significantly upgrade the functionality in its hosted application in light of analysts' comments on its shortcomings.

"There is a need for SaaS software that offers a premise-based option," Kingstone maintained. Many companies have yet to fully absorb their existing premise-based IT systems and infrastructures. They need a SaaS offering that can accommodate their circumstances.

Moving software to the Web is more than a tech issue. "It is also a cultural shift that will take many years to accomplish," Kingstone remarked. In the interim, companies will need hybrid options.

Definition of Hybrid

A hybrid SaaS is not limited to an application built to offer two deployment options, such as Siebel or SAP, Kingstone explained, noting that vendors like Salesforce.com are able to integrate into on-premise systems.

"Salesforce.com has a lot of SAP and Siebel customers, and it has integrated its application into their existing software," she pointed out. "Those can be considered hybrid deployments too."


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