Uncommon Wisdom

Dec 23 2008   8:27PM GMT

SaaS could be 2009 capex avoidance plan

Tom Nolle Tom Nolle Profile: Tom Nolle

Many are expecting that companies will turn to cloud computing to avoid capex in 2009, and there are certainly indicators that would suggest that at least some are doing just that. Past history and buyer research. however, shows that companies often stand pat on older strategies during a downturn and change only when things get a bit better again.

In past declines, companies have not switched technologies as fast as in good times, even to apply cost savings. The reason is that they’re afraid of disrupting operations when they need all the sales and profit they can get. We expect that cloud computing might do extremely well in 2009 relative to current levels, but not explode as some expect.

In 2010, we could see a considerable ramp in cloud computing use. Software as a service (SaaS), on the other hand, appears likely to have a noticeable surge in sales in 2009 as companies turn to the model to avoid short-term application investments and expansions in IT due to new software needs.

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