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Packaged cloud apps overpriced and lack choice

Microscope contributor


Software as a service (SaaS) might be being held back from wider adoption because of the price tag, with users put off by the costs of hosted applications.

In a blog post Michael Maoz, research vice-president and distinguished analyst at Gartner Research, said that in 75 meetings with customers across three continents the price theme had emerged as one that was causing concern.

"An interesting and recurring statement I am hearing from IT and business leaders is that, barring serious discounting, SaaS vendors are charging too much money for the business to convert their applications wholesale over to the cloud model with these vendors," he said.

He added that most of the CIOs he spoke to liked the idea of packaged cloud services but apart from price also commented that they were not yet seeing applications in areas where they would look to use hosted services.

"They are voicing reservations because they don’t see robust installations in key areas such as insurance claims, reservation systems, core banking, telecom call centres or government agencies," he said.

Moaz's comments follow on from a growing feeling among those resellers on the front line that cloud will be held up by the lack of agreed standards.

At the MicroScope channel summit earlier this autumn resellers said that aside from the success of Salesforce.com it was hard to see any other products that had yet broken through to the mainstream.


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