24 Oct 2008

SaaS prices 'could fall'

Businesses could benefit from falling prices in software-as-a-service (SaaS) applications as competition in the technology market heats up, an expert has suggested.

Graham Smith, chief financial officer at US industry firm Salesforce.com, told the IDG News Service that the impact of the credit crunch could spark higher competition in the SaaS market, which might lead to price falls.

Businesses are attracted to SaaS applications in the current economic climate because they can save money on the cost of hardware and software upgrades while gaining access to faster deployment, Mr Smith said.

"It won't surprise me if going forward in these times that we see much more aggressive pricing," Mr Smith told a conference of IT investors in New York.

Retail Systems Research managing partner Paula Rosenblum recently predicted that SaaS is a suitable investment option for IT firms at present because banks are currently reluctant to lend money for other potential projects as a result of the credit crunch.