While many reports tout Software as a Service (SaaS) as being better, faster, and cheaper than licensed software, the actual experience is less rosy -- at least according to a new study by industry research firm Gartner.

"Many customers are underwhelmed by their current experience of it and sense that SaaS is not quite the panacea it often promised to be," Gartner concluded in its survey.

The report, which surveyed 333 organizations in the U.S. and U.K. in December 2008, found that users were dissatisfied with the pricing, integration, and in some cases even the technical capabilities of SaaS products.

Of those who had looked at SaaS products but chose not to deploy them, 42 percent said cost had been the barrier, while 38 percent cited integration issues. Thirty-three percent said the SaaS solution they looked at failed to meet technical requirements.

Gartner said that the survey is a wake-up call to SaaS vendors.

"At a time when SaaS is becoming more of a consideration for more enterprises, the results of this survey will be somewhat disquieting for SaaS vendors," Twiggy Lo, principal research analyst at Gartner, said in a statement.

She added that SaaS vendors must refocus on delivering on the promise of SaaS. They must deliver products that do not require consultants, and are cheaper and easier to use than their licensed software competitors.

The survey asked users to rate their satisfaction with 16 aspects of the software. It reported that users rated all aspects similarly, averaging 4.74 out of 7 in satisfaction.

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As a result of this moderate satisfaction level, 58 percent of those surveyed said they'd maintain their current level of SaaS in the enterprise. Thirty-two percent will increase their use of SaaS, while 5 percent will decrease it and an additional 5 percent will discontinue it altogether.

Some pushback

It's not the first time that Gartner has issued this warning. In February, the company said that SaaS costs more than many prospective users realize. At the time, several SaaS vendors told InternetNews.com that Gartner's objections did not apply to their products.

The same reaction is occurring today on Twitter. Lincoln Murphy, founder and managing director of SaaS adviser Sixteen Ventures tweeted that SaaS vendors wouldn't fail the test if only they truly understood the SaaS model.

Tech recruiter Naomi Bloom wondered whether some objections to SaaS had more to do with fears about losing a job than about the performance of the software.