SaaS adoption is rising with a poll of 120 Australian IT executives released Thursday showing 41 percent will increase spending on this delivery model this year.

Released by ACA Research, a further 85 percent will consider buying SaaS over on-premise software.

Saleforce.com Japan vice president for marketing, Jeremy Cooper, said traditional on-premise software vendors such as Microsoft will have difficulty adapting to this new environment.

"Microsoft will need to abandon entrenched [premised-based software] values if it wants to succeed in SaaS, which means changing its technology, business, and cultural models," Cooper said.

"They survive primarily on profits made in securing a customer for the long haul with consistent revenue in maintenance and support.