Cutter Consortium has released a report by Jeffrey Kaplan titled Software-as-a-Service on the Rise. The analysis says that their survey gives “proof” that the “interest and adoption of on-demand software solutions is accelerating” and that “a third of organizations are already using SaaS solutions and an equal portion are considering SaaS.”The numbers from the survey do show a jump in interest in SaaS from 34% to 43%, but the number of SaaS users actually hasn’t changed between 2005 and 2006. One might have expected that, given the overall upward trend of SaaS, the percentage of real SaaS adoptors would have increased over the last year. That’s a little surprising. It looks like conversion of tire-kickers into adoptors will be the challenge for 2007.The report also concludes that ROI and cost-effectiveness is the main driver for why companies are moving towards the SaaS model.Kaplan also noted that statisfaction rates of SaaS users slipped from 90% last year to 80% this year. Kaplan says a drop like that is natural during the early going for any new technology and he attributes it to unrealistic expectations from users of SaaS. Like any software product users need to do their homework and thoroughly evaluate vendor capabilities before making a selection.Kaplan gives SaaS high marks for reliability and functionality, but in the area of cost savings, the top reason wny SaaS is attracting attention, it hasn’t matched people’s expectations. Startup costs related to integration and data migration often made the move to SaaS more expensive than expected.SaaS has a lot of positives, but like any technology, it is often hard for reality to live up the hype.