While Many Companies Try SaaS for Cost Savings, Top Performers Discover Competitive Advantage, According to IBM Study

ARMONK, N.Y and ORLANDO, FL - 28 Jan 2014: Today at IBM Connect 2014, IBM (NYSE:IBM) announced that nearly half of the businesses using Software-as-a-Service (SaaS) are achieving competitive advantage, rather than simply reducing costs. Leading enterprises those gaining competitive advantage through broad SaaS adoption are collaborating more effectively through social business tools, improving the customer experience, and accelerating time to market through their SaaS initiatives, according to a recent survey conducted with more than 800 IT and business decision makers worldwide by the IBM Center for Applied Insights. [1]

Global spending on SaaS is expected to reach $45.6B by 2017, according to industry estimates. SaaS is often used by line-of-business leaders who are looking to deploy technology to rapidly provide their teams with needed functionality, increase productivity and address new market opportunities. In fact, industry analysts estimate that by 2017, CMOs will spend more on IT than CIOs, while Forrester reports that 65 percent of business leaders have plans to buy technology for their group without involving IT at all.

However, circumventing IT to deploy SaaS without provisioning and securing it first can have unintended consequences, and IBM's study suggests that organizations in which IT and business leaders work together to select, secure and deploy SaaS applications are in fact the ones who deliver the greatest value to their organization. Further, organizations that are gaining the most out of their SaaS deployments are more likely to see it as a critical piece of their enterprise cloud strategy when compared to their peers.

Princess Cruise Lines originally turned to SaaS to save money and benefit from increased efficiencies while gaining instant access to technology resources. Over time, however, the company realized that the IBM Connections social software platform, delivered as a service through the cloud, fostered a more team-oriented environment resulting in more innovative thinking. Princess uses this as a competitive differentiator in the market to tout its superior customer service, the net effect of a socially advanced workforce.

Nearly one in five companies that responded to IBM's survey has deployed SaaS broadly and is now gaining competitive advantage as a result. By developing mature and cohesive enterprise-wide SaaS strategies, these Pacesetter organizations are able to improve market agility, achieve a deeper level of collaboration and make better decisions than their peers. Specifically, compared to peers that are newer or less advanced with their SaaS adoption, Pacesetters are:

79 percent more likely to have increased collaboration across their organization and ecosystem through SaaS

More than twice as likely to have leveraged analytics across the organization to turn big data into insights using SaaS

More than twice as likely to have increased innovation using SaaS

The study confirms that SaaS is delivering on a wide array of benefits, on top of lowering total cost of ownership, and shows that organizations that strategically and collaboratively deploy SaaS are able to execute on programs that drive business growth better than their peers who lag with SaaS deployments.

It's common knowledge that deploying SaaS broadly has economic advantages, but the truly innovative companies have recognized that SaaS delivers real competitive advantage to fuel top-line growth, as well, said Craig Hayman, IBM General Manager, Industry Solutions and executive sponsor of the study. Whether they are using it to enter new markets, transform or create entirely new business models, or improve relationships with their customers and suppliers, pacesetting organizations are embracing SaaS in a meaningful way.

IBM Delivers Broad Set of SaaS Solutions

To help organizations accelerate innovation around customer experience and meet their business objectives in concert with their companys IT strategy, IBM unveiled the industry's firstcloud-suites for the entire c-suite in June 2013. The offerings which provide specific solutions for key leaders and their departments across the enterprise from marketing to sales to finance to HR to procurement and more can be used to help customers drive competitive advantages with SaaS.

IBM is building on its industry leading portfolio of SaaS products with a series of new SaaS applications that it announced today at Connect.

Attend the SaaS study session at Connect 2014 titled Embracing SaaS: Strategies of Winning Organizations at the Walt Disney World Swan Hotel Toucan 1 & 2 room on Thursday, January 30 from 10:00 11:00am ET.

For more information or to download the full report visit ibm.com/ibmcai/saas

About the study

To gain a better understanding about how leaders are unlocking competitive advantage through SaaS, the IBM Center for Applied Insights conducted a survey of 879 IT and line-of-business decision makers in six countries globally, including Brazil, China, India, South Africa, the UK and U.S. Twenty-two percent of respondents are C-level executives (10 percent C-level IT and 12 percent in other C-suite roles). They work in enterprises of varying sizes 20 percent with 10,000 or more employees and, at the other end of the spectrum, 40 percent with less than 2,500 employees.

About the IBM Center for Applied Insights

The IBM Center for Applied Insights introduces new ways of thinking, working and leading. Through evidence-based research, the Center arms leaders with pragmatic guidance and the case for change.

About IBM Cloud Computing

IBM is the global leader in cloud with an unmatched portfolio of open cloud solutions that help clients build, rent or tap into cloud capabilities. IBM cloud supports 30 percent more top-level websites than any other cloud computing provider. Among t

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