By eddieadams | August 20, 2010

Cloud computing has become an integral tool for businesses looking to streamline their operations and reduce their capital expenditures. Different cloud offerings, including hosted software and IaaS, have been growing in popularity, as companies recognize the inherent benefits of reducing equipment and focusing resources on services.

The SaaS market is growing rapidly, especially among small- and medium-sized businesses, which can benefit from a pay-per-use system. The increased demand for the cloud has made the market more competitive for vendors, who are recognizing that they must continue to work on their software development if they want to become the preferred choice for consumers.

Although businesses are becoming more aware of the benefits from Iaas and PaaS, SaaS continues to be the most mature type of cloud computing, according to Gartner. The research group said nearly all companies have introduced SaaS at some level in their business operations, though oftentimes it is done without the consultation of IT staff.

When this occurs, IT departments are left to clean up the mess. A quick and poorly researched adoption of the cloud can result in a company teaming with a provider who does not have the software development tools to offer the latest cloud services available. As Gartner puts it, poor technology can result in a company falling behind the "SaaS adoption ‘curve.’"

Cloud services experts have developed a few key steps to ensure business leaders select the best cloud options available.

A company CEO may hear about the benefits of SaaS and want to deploy a cloud strategy quickly to start maximizing their operations as fast as possible. However, similar to any business investment, proper research and evaluations must take place. Before signing up for a SaaS solution, company leaders should consult with IT staff to determine the company’s needs and how software provided by a vendor can meet and manage those needs.

Another effective strategy prior to introducing SaaS is to develop a policy and governance document that will help companies implement the solution evenly and consistently through their various sectors. Once these policies are formed, companies can then establish an integration blueprint to highlight how the new cloud applications will fit into the businesses’ structure. To complete this task, many business leaders have hired integration providers who can help guide companies through the initial workings of the cloud.

Spending on cloud services and products is rising, especially in the United States. A recent report from Companiesandmarkets.com found spending on IT goods and services will reach $511.4 billion this year, with a compound annual growth rate of 6.5 percent during the next four years.

Hosted SaaS security solutions will be a major factor in the growth of the SaaS market, according to Canalys. The research group found hosted security grew by 19 percent between 2009 and 2010 and will reach $1.2 billion by 2014.