Retailers lowered their IT expenditure by 17 percent after deploying SaaS (News - Alert), claims Aberdeen in its report, “Retail On-Demand: Software as a Service Takes Off.”
The research firm conducted a survey of 110 retailers during December 2008 and January 2009 and compared the figures with the same time period a year ago.
SaaS, or Software-as-a-Service, gives customers the freedom to use and pay for only select components of their choice from software suites, and the flexibility to add other requisites as and when the need arises. Prior to this innovative customer-driven request for a-use-and-pay-when-required-only approach, entire solutions had to be bought and installed at a significantly higher one-time cost.
Another up-front double whammy factor that earlier compounded financial woes was either the high price of a single license for an entire enterprise, or the available alternative which was cost per licence per device/user.
Customers can now feel their way around, get professionally trained and gain expertise before adding modules either in multiples or with other functions. Tighter control can now be kept on budget allocation and previously blocked chunks of funds can be used, or even not used, elsewhere.
Companies supplying SaaS also benefit as bug-fixing becomes localized, the time to rectify gets telescoped and customers are satisfied. From a marketing perspective, a happy customer is the ultimate vehicle for building business.
"Under present economic conditions, SaaS-based Web commerce applications do support the lean IT initiatives of retailers both in terms of reducing capital infrastructure and associated IT support costs," said Sahir Anand, senior retail analyst and author of the report.
One-third of the companies in Aberdeen’s (News - Alert) study used SaaS-based solutions for controlling and handling select dimensions of their Web-based platform. For example, New York & Company, a chic apparel retailer, outsourced its Web platform to a third-party which uses SaaS. And Best Buy, a consumer electronics retailer, has a contract with a SaaS company to continuously handle changes in rates, specs, quantities and special deals.
Another key trend is to improve the final consumer’s Web-shopping experience. An emerging trend is aligning SaaS applications with company ideals and road maps. This clearly indicates a once pervading knowledge and usage gap at the time of procuring applications and services.
The report also found that two-thirds of respondents opted for generalized Web application offerings from SaaS vendors. One reason is that shopping online is becoming convenient due to the widespread and growing acceptance of broadband, as reported by TMC (News - Alert).
The second reason is that an increasing amount of people are moving towards e-purchasing based on social network referrals, and companies want to leverage this advantage.
Vivek Naik is a contributing editor for TMCnet. To read more of Vivek's articles, please visit his columnist page.Edited by
Michelle Robart
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