For Sourcing & Vendor Management Professionals (Length: 11 pages)

July 13, 2009

The ROI Of Software-As-A-Service

A Total Economic Impact™ Analysis Uncovers Long-Term Value In SaaS

by Liz Herbert, Jon Erickson

with Christine Ferrusi Ross, Andrew Parker, Philipp Karcher


Executive Summary (This is a document excerpt)

Firms almost always consider software-as-a-service (SaaS) as a cost-advantage over on-premise in the short run due to its quick implementation times and pay-as-you-go pricing. But many firms question the long-term value of SaaS, wondering if the rent-versus-own model necessarily has a cost crossover point and if so, when? As SaaS continues to move into a broader range of applications and into larger, more strategic deployments, Forrester examined client decisions across a range of SaaS solution areas and found that firms obtain long-term value with SaaS solutions.

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TABLE OF CONTENTS

NOTES & RESOURCES

itemFirms Explore SaaS For More Strategic, Larger, Long-Term Investments

itemThree Factors Determine The ROI Of SaaS

itemKey Benefits: SaaS Enables Fast Deployment, Better User Adoption, And Reduced Support Needs

itemKey Costs: Subscriptions Balance With Reduced Implementation, Upgrades, And Training

itemRisk Analysis: Cost Savings And Adoption Rates Can Be Uncertain

itemCalculating ROI For SaaS Has Specific Considerations By Application Type

itemSaaS Can Be A Long-Term Win As Well — With Benefits Beyond Cost Savings

recommendations

itemSourcing Execs Should Weigh The Company-Specific Tradeoffs Of SaaS

itemSupplemental Material

Forrester interviewed vendors and users of SaaS solutions and leveraged past research and inquiries. We also conducted in-depth case studies with clients of HP, salesforce.com, and Workday. We used this information to create an ROI model based on our TEI analysis framework.

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Find Documents In Related Categories

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Analyst: Jon Erickson, Liz Herbert
Technology: IT Services, IT Spending & Budgeting, Outsourcing, Sourcing & Procurement, Sourcing Strategy & Execution, Total Economic Impact™
Geography: Asia Pacific, Europe, North America

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