In the times of the economic downturn, market researcher IDC is projecting a steep growth of the SaaS model - of over 40% in 2009. The right-sized, zero-CAPEX alternatives offered by SaaS vendors is going to lure customers to adopt such technologies. Even as companies seek to reduce thier capital expenditure and postpone new technology investments, Robert Mahowald, director, On-Demand and SaaS research IDC, says:

With a broad slowdown across IT sectors, businesses are increasingly bearish about their short-term ability to invest, whether for stability, growth, or cost savings down the road. But SaaS services have benefited by the perception that they are tactical fixes which allow for relatively easy expansion during hard times, and several key vendors finished the year very strong, reporting stable financial and inroads into new customer-sets.

From our experience of selling cyn.in On-Demand, I find it to be more true than ever. The economic conditions have forced businesses to consider a "change" that was not considered necessary during more affluent times. We've been in the SaaS business since 2006 and since the last quarter we have seen a steep increase in sales in our SaaS edition. Some of the most important reasons that we've seen are:

1. Businesses are looking at reducing travel costs for team meetings and even client meetings
2. Recession is making companies encourage their employees to work from home - reducing infrastructural spends at the office premises
3. Reduced staff due to layoffs is forcing companies to focus internal IT initiatives only on direct, line of business technology - and outsource infrastructure related management
4. Low, cost-saving technology options - Companies are aiming to reduce their capex by exploring hosted applications, wherein they have to pay-as they consume without making upfront investments

Is your company looking at adopting SaaS technologies? Do share your opinions in the comments. Read more about Benefits of SaaS