A recent study showed that 7 out of 10 CIOs plan to invest in IT solutions in the next year, despite economic concerns. Of these, 43% said that they plan to invest in information security, 28% in virtualization, 27% in data center efficiency, 26% in VoIP and 26% in Software-as-a-Service (SaaS).
In fact, according to Projects@Work, "Subscribing to SaaS — rather than purchasing software licenses — is a particularly attractive option for businesses with tight IT budgets. Since applications and data are stored and hosted on the Internet and accessed remotely, this model removes the burden of maintenance, support, software license upgrades and equipment from end users."
In my company we've found that our SaaS customers are 6 times more likely to still be customers 5 years later. I think this is in part due to the fact that many companies overestimate the rigor with which their IT departments attend to backups, virus prevention and other IT security tasks. Additionally I've always thought that SaaS is easier for vendors to support, since they can bring your site up and look at it instantly.
Curt Finch frequently writes for a project management blog.