SOURCE: Aberdeen Group

Aberdeen Group

February 11, 2009 11:00 ET

Best-in-Class Retailers Reduce Online IT Costs Due to SaaS Deployments

BOSTON, MA--(Marketwire - February 11, 2009) - Aberdeen, a Harte-Hanks Company (NYSE: HHS), surveyed 110 retailers between December 2008 and January 2009 to determine that post-SaaS-based deployments within several areas in the retail online technology value chain, Best-in-Class retailers reduced their IT costs by 17% (year-over-year). To obtain a complimentary copy of the report, visit: http://www.aberdeen.com/link/sponsor.asp?cid=5622.

According to the retailers surveyed, one-third have deployed some level of SaaS delivery for their web commerce platform in terms of bandwidth, content management, search, comparison shopping, analytics, or other personalization tools. There are several examples of SaaS-based web platform models, such as the one adopted by New York & Company, where they've outsourced their entire web platform to a SaaS-model company, or Best Buy, which utilizes a SaaS vendor to manage their dynamic content management. That's two major companies using SaaS-deployed applications in very different, but very meaningful ways. "Under present economic conditions, SaaS-based web commerce applications do support the lean IT initiatives of retailers both in terms of reducing capital infrastructure and associated IT support costs," says Sahir Anand, senior retail analyst and author of the "SaaS in Retail" benchmark report.

According to Anand, "From the end user's perspective, the key benefits are the opportunity to more freely try initiatives, remove technical complexity, and ensure the highest levels of service. Other benefits include vastly improved scalability, lower total cost of ownership (TCO) -- you only pay for what you use, and economies of scale. Due to many users of the same application, the vendor is incentivized to deliver functionality on a frequent basis and to resolve any bugs or other technical glitches immediately." Retailers can achieve the degree of online flexibility and system responsiveness now necessary to remain competitive. The current recessionary conditions have brought to the fore three key trends: 1) Migrate appropriate applications away from the retailer IT to a third-party SaaS vendor hosting and maintaining the application; 2) Align SaaS solutions with the company's vision, mission statement, and business model; 3) Place customer-facing, shopping-enhancing applications at the front of the priority list.

In SaaS technology investments, web applications are far and away the leaders of the pack, with 65% of respondents indicating that this was the leading area of SaaS IT spend. This large number is a result of a confluence of factors: the "mainstreaming" of ecommerce across heretofore reticent socio-economic lines; the near pervasiveness of broadband; and a whole host of personalized applications often lumped under the umbrella of web 2.0 applications. These all contribute to a more satisfying, content-filled, dynamic and immersive ecommerce shopping experience.

A complimentary copy of this report is made available due in part by the following underwriters: Certona and ClairVoyix. To obtain a complimentary copy of the report, visit: http://www.aberdeen.com/link/sponsor.asp?cid=5622.

For additional access to complimentary Retail Research, please visit http://research.aberdeen.com/index.php/-retail.

About Aberdeen Group, a Harte-Hanks Company

Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen™ for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

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