William Band, Vice President, Principal Analyst Webinar Use Forrester’s SaaS Capabilities Maturity Assessment: How To Determine Fit And Readiness For Adopting Cloud Solutions Introducing Forrester’s Self-Test For SaaS Readiness William Band, Vice President, Principal Analyst Liz Herbert, Principal Analyst April 16, 2013. Call in at 10:55 a.m. Eastern time

Agenda Understand as-a-service adoption trends. Be aware of challenges and pitfalls. Use the Forrester SaaS readiness assessment.

Don’t get blown away by the as-a-service explosion. Image source: US Department of Defense (http://www.defense.gov/)

Innovation and growth top technology spending priorities “How much of an impact do you believe the following changes and initiatives will have on your firm’s IT services spending over the next 12 months?” Base: 1,058 IT services decision-makers; Source: Forrsights Services Survey, Q2 2012

SaaS will equal nearly $60B this year Source: January 3, 2013, “Global Tech Market Outlook 2013 To 2014” Forrester report

But, as-a-service complicates the vendor landscape “Which of the following statements about managing as-a- service offerings do you agree with?” Base: 1,058 IT services decision-makers; Source: Forrsights Services Survey, Q2 2012

Agenda Understand as-a-service adoption trends. Be aware of challenges and pitfalls. Use the Forrester SaaS readiness assessment.

SaaS spending is increasing faster than other categories Base: IT services decision-makers; Source: Forrsights Services Survey, Q2 2012

Usage among SaaS adopters continues to increase “Using your best estimate, how many different software-as-a-service (SaaS) applications did your firm use/is your firm likely to use . . . ?” Base: 1,340 software decision-makers from firms with 20 or more employees who are using SaaS; Source: Forrsights Software Survey, Q4 2012 Note: 291 respondents replied “Don’t know.”

Buyers are seeing a rise of industry-specific SaaS solutions and community clouds Image source: Veeva Systems (http://www.veevasystems.com); salesforce.com (http://www.salesforce.com/); UK Government (http://gcloud.civilservice.gov.uk/)

SaaS solutions from large, traditional ISVs are increasing “Which type of vendor would you be mostly likely to use for software-as-a-service (SaaS) business applications in the cloud?” Base: 1,875 software decision-makers who are using SaaS; Source: Forrsights Software Survey, Q4 2012

Agenda Understand as-a-service adoption trends. Be aware of challenges and pitfalls. Use the Forrester SaaS readiness assessment.

The drivers of SaaS adoption are improved business agility, speed-to-value, and vendor-delivered innovation “How important were the following benefits in your firm’s decision to use SaaS?” Base: 920 packaged applications decision-makers; Source: Forrsights Software Survey, Q4 2011

But security, integration, and vendor lock-in are buyer concerns “How concerned is your firm with the following potential issues around using software-as-a-service (SaaS)?” Base: 1,875 software decision-makers who are using SaaS; Source: Forrsights Software Survey, Q4 2012

Cloud solutions are deployed more quickly and adopted more rapidly than comparable on-premises solutions The ROI of cloud apps: Total Economic Impact™ Factor Impact of SaaS versus on-premises Estimated implementation cost SaaS solution 1 to 2x one year subscription fees On-premises solution 3 to 5x license fees Time-to-deploy 6 to 9 months (phased approach) 9 to 18 months (or longer) Cost to add a new user SaaS app versus on-premises solution Decreased by 3x Ramp-up time for new users for SaaS app versus on-premises solution Decreased by 50% Employee utilization of SaaS app versus on-premises solution Increased by 9% Support/help desk needs of SaaS app versus on-premises solution Reduced by 50% Level of effort for integration of SaaS app versus on-premises solution Similar level of effort SaaS as on-premises solution doing if doing the same integrations — but many organizations can simplify integrations by moving to a cloud model Source: June 23, 2011, “The ROI Of Cloud Apps” Forrester report Note: Forrester interviewed vendors and users of SaaS solutions and leveraged past research and inquiries. Forrester also conducted in-depth case study reviews with clients of HP, salesforce.com, and Workday

But new governance practices are required to take advantage of cloud solutions’ flexibility and speed Source: November 12, 2012, “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report

The adoption of SaaS accelerates the change in mix of IT skills from “blue-collar” to “white-collar”

Agenda Understand as-a-service adoption trends. Be aware of challenges and pitfalls. Use the Forrester SaaS readiness assessment.

Forrester SaaS readiness assessment — five key areas Category maturity Questions about business process complexity, relevance to business users, speed of process change Technical readiness Questions about integration needs, customization, security, bandwidth, and performance needs Application development readiness Questions about in-house and partner developer capabilities and models

Forrester SaaS readiness assessment — five key areas (cont.) Governance readiness Questions about request management, support, user management, and IT governance models and tools Sourcing readiness Questions about sourcing models, contracting for SaaS, SLAs, and vendor management for SaaS

SaaS capabilities assessment: what it means Source: January 22, 2013, “SaaS Capabilities Maturity Assessment ” Forrester report

SaaS capabilities assessment: category fit Source: January 22, 2013, “SaaS Capabilities Maturity Assessment ” Forrester report

SaaS capabilities assessment: technical fit Source: January 22, 2013, “SaaS Capabilities Maturity Assessment ” Forrester report

SaaS capabilities assessment: app dev maturity Source: January 22, 2013, “SaaS Capabilities Maturity Assessment ” Forrester report

SaaS capabilities assessment: governance maturity Source: January 22, 2013, “SaaS Capabilities Maturity Assessment ” Forrester report

SaaS capabilities assessment: sourcing maturity Source: January 22, 2013, “SaaS Capabilities Maturity Assessment ” Forrester report

Example output: SaaS could be a good category fit, but the SaaS readiness assessment reveals potential hurdles in governance and technical fit Scoring key: >4: Strong fit for cloud; high maturity and readiness to move to cloud >3 and <4: High potential for success with a cloud solution if gaps are addressed >2 and < 3: Possible to succeed with a cloud solution but significant gaps exist >1 and <2: Low potential for success with a cloud solution; significant hurdles <1: Extremely unlikely that cloud would be suitable for this business area

Recommendations Longer-term success with SaaS requires careful planning. Organizations must identify opportunities to succeed with SaaS — and hurdles that could limit results. IT must change to meet today’s fast pace of change and strong demands from the business. Forrester’s SaaS maturity assessment tool provides a self-test for SaaS readiness — to identify opportunities and gaps.

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Liz Herbert +1 617 613 6011 eherbert@forrester.com William Band +1 617 613 6323 wband@forrester.com

Selected Forrester research January 22, 2013, “SaaS Capabilities Maturity Assessment” November 12, 2012, “Capitalize On SaaS CRM Solutions With Better Governance” January 26, 2011, “How SaaS Will Change Technology Sourcing Strategy”