IT teams nervous as SaaS soars

The relentless growth of SaaS (Software as a Service) deployments is putting the future of internal IT department in jeopardy.

In 2011, businesses will spend $12.1 billion on software hosted by a third party, according to analyst Gartner - a 21 per cent increase on last year. By 2015, spending will reach $21.3 as the software subscription model becomes ubiquitous. The most popular usage of SaaS will be in Customer Relationship Management, with deals to shift customer-facing systems to the cloud worth $3.8 billion in 2011.

Tom Eid, research vice president at Gartner says that the primary driver for SaaS currently is cost: "Initial concerns about security, response time and service availability have diminished for many organisations as SaaS business and computing models have matured and adoption has become more widespread."

The move to SaaS does leave question marks regarding the diminished role of the in-house IT department. With many enterprise software systems being managed and supported off-site, the influence and demand for strong internal IT is likely to fall. To offset this trend, technical departments must evolve the current break/fix mentality regarding the delivery of IT and turn their attention to supporting consumer devices and developing technologies such as ecommerce, which can help generate profits.