Software as a Service (SaaS (News - Alert)) is rapidly gaining in popularity, yet users in Australia seem to be struggling to gain the expected value out of their customer service software solutions.

According to recent research by analyst firm Gartner (News - Alert), Australian companies are the least satisfied with their SaaS solutions. Research into the adoption of SaaS in the Asia Pacific region found that greatest number of problems occurred with implementations in Australian companies.

The most significant problem reported was integration with current environments, followed by a lack of functionality, a limited return on investment and data security.

Gartner Principal Research Analyst Twiggy Lo noted in a Network World (News - Alert) blog that the first wave of SaaS deployments were relatively simple and "stand-alone", meaning they did not require sophisticated integration activities.

As the scale of SaaS deployments grows, the integration bar is being raised and SaaS providers need to realize that they are not only directly responsible for their own application; they also need to pay attention to how the application is used in a broader context. This is what is important to the customer.

Gartner research determined that Australian companies tend to be wary of SaaS and customer service software as a result of the difficulty and inflexibility of customization. They are also concerned with the lack of vendor support capability and network instability.

Lo highlighted that much of this apprehension could be attributed to the reality that both end users and SaaS providers are on a learning curve. As such, providers need to set clearer expectations about the benefits and issues of SaaS.

"There is a lot of confusion in the market over what SaaS really is," she said in the blog. "Many providers claim they provide SaaS, but it is really hosted application services with the cost spread out over the contract term much like managed services and not on a pay-for-use basis."

In its evaluations of the overall SaaS and customer service software market in this region, Gartner found that the most commonly used SaaS enterprise applications were financials, e-mail, sales, expense management and customer service and support. The biggest drivers for use over on-premise solutions were total cost of ownership and the ease and speed with which SaaS can be deployed.

Gartner research highlights that the perceptions of lower cost and faster deployment are not always the case. These perceptions are actually highly dependent on the time frame, especially when measuring cost. SaaS is generally less expensive in the first two years, yet on-premise solutions challenge the cost structure at year three.