ERP SaaS or Software as a Service Applications Have Arrived

There is a lot of buzz going on about ERP (enterprise resource planning) SaaS applications, or software as a service, solutions that have been skyrocketing in popularity and user installed base over the past five years. These web based solutions have gone way beyond the early adopters milestone and customer acceptance milestone. SaaS based solution are now a formidable competitor and alternative to traditional on-premise ERP solutions. The statistics speak for themselves, as more than 50 percent of all North American companies currently use one or more SaaS based product and or application. This strong consumer demand for web based ERP Solutions has ignited the development of hundreds of new enterprise resource planning software on demand products and apps into the market as companies continue to scramble for tools and technologies in the tough economic climate to cut costs, deliver more value, and drive more profit.

The key features and benefits contributing to the increasing SaaS based ERP Application are the low capital costs required to get going on the application, the quickness and ease of the apps integration and deployment, and the low IT resources required to bring a new SaaS based solution on board.  These key factors are a multiple win for companies and their rising return on investment requirments. The high adoption rate of more than fifty percent of all US companies are a clear sign that these web based  solutions are a no brainer for both large and smaller sized companies as they strive to gain incremental sales while spending less.

ERP experts agree that even more than the robust features, user friendliness above and technical attributes SaaS based ERP apps offer, in this tough environment, the pay as you go financial structure inherent in software on demand applications are a very big driver for the popularity of the solutions. The mentality of only paying for what you use bodes well in a recessionary environment and makes a once unaffordable technology for smaller companies, affordable. The 40% annual growth rate for SaaS solutions in 2008 will be hard pressed to maintain its pace in 2009, however, the current user base and adoption trends show that SaaS software may again match the prior years record growth and continue to be a formidable competitor to traditional on site ERP systems that have dominated the market place over the last 30 years.

As companies get more accustomed to SaaS solutions, the number of SaaS products and vendors in the market will continue to increase. So much so that the high demand of these products are forcing leading on premise ERP vendors to develop their own in house SaaS based solutions to compliment their current offerings and compete with the wave of new entrants in the ERP arena and fight to maintain market share levels. Over the 5 years, analysts are estimating that on in three business applications, not just ERP software, will be a web based application.

Although there are powerful SaaS applications on the market today, it is still questionable whether a viable comprehensive full enterprise wide solution that is web based exists. Organizations for a single solution may need to go with the on premise applications. However, given the flexibility, low capital, faster deployment of web based apps, IT managers should seriously consider the technology trends of SaaS offerings in their software selection due diligence.