Europe poised for SaaS explosive growth

Earlier this year, Saugatuck published a Research Report, covered in one of my recent blog post entitled “Three Waves of Change: SaaS Beyond the Tipping Point”. This report is describing the rapid acceptance of SaaS over the past year and clarifying how SaaS is shifting and evolving as well as how these changes will affect both user and vendor organisations over the next several years.

Another interesting Saugatuck Strategic Perspective entitled “SaaS Adoption in Europe: A Closer Look at Rapid Growth” identifies the similarities and differences between North America and Western Europe, as SaaS adoption currently explodes across all market segments.

A quiet but steady growth in demand is indeed occurring in Western Europe. If, as suggested by Saugatuck, European adoption of SaaS lags North American adoption by 12 to 18 months, we can expect that European use of SaaS for mission-critical workloads will also spike over the next year or two, following very similar patterns. 

Nevertheless, important differences between the two regions exist. Adoption drivers show that much of Europe is still focused on what could be referred to as Wave I-style SaaS: point solutions that result in “islands of SaaS automation”, while their North American counterparts begin to address the central challenge of Wave II: integrating tightly into the enterprise.

European executives are far more concerned with faster time to market, converting fixed IT costs to variable costs, and increasing revenues as benefits expected from SaaS deployments. They are also far more concerned with data security & privacy and are significantly more strongly motivated by reducing risk than North Americans. 

North American executives, meanwhile, are much more likely to be looking to simplify their software management challenges while improving service levels and internal & external collaboration – their objective being to build enterprise-wide business processes on a foundation of SaaS solutions integrated with the existing on-premise applications portfolio.