More than one in three (37 per cent) IT decision-makers will use software-as-a-service (SaaS) to replace or supplement their enterprise resource planning (ERP) systems over the next two years, according to IDC.

The analyst's survey of European companies suggests that SaaS is finding increasing popularity among users. A further 35 per cent of respondents said they would use the SaaS model to assist with customer relationship management, while 32 per cent said they would use it to support their supply chain.

"We were somewhat surprised that European end users are so positive when it comes to investing in business solutions delivered as a service," said Bo Lykkegaard, research director in IDC's European enterprise applications and services programme.

"We believe SaaS spending will be directed at new applications and at replacement of broken applications, rather than at ripping and replacing working solutions. European organisations seek to leverage the SaaS delivery model to reduce risk, complexity, and upfront costs of new IT initiatives."

IDC interviewed 2077 managers from European organisations with 20 employees or more.