Wednesday, January 02, 2008
2008 A Breakout Year For SaaS
byNo matter whose IT predictions you look at for 2008, software as a service (SaaS) looms big. For those not familiar with this term, SaaS is software that customers do not pay to own. Rather, it is an on-demand system usually hosted through a third party and customers access the software’s applications via the Internet.
The SaaS model has seen tremendous growth in the last few years primarily because it is easier and costs less to implement than large enterprise systems that reside on a company’s own servers. Some fast-growing SaaS vendors include companies such as Salesforce.com, RightNow, and NetSuite, but there are many companies charging hard to catch-up in this sector including software giants Microsoft and Oracle.
There are a number of stories that have surfaced in the last few months indicating SaaS has reached a crucial tipping point, and 2008 may be the year that it begins its breakout to become the norm for most companies:
• IT Management lists 10 Mega-Trends For IT in 2008. The article says, “forces in the IT industry that were once seen as disruptions will be embraced as the new status quo.” Among those forces that IT Management is talking about is the SaaS, online delivery model. The article goes on to say, “Businesses that fail to ride the wave of change created by these forces do so at their own peril...More market share is certain to shift in the next five years — as a result of these new approaches — than we saw in the last ten.”
• Business Intelligence has listed five big business intelligence trends for 2008 and the growth of the SaaS model is listed as number one. The rest of the list is also filled with on-demand solutions.
• The Think IT Blog also recently published a list of its top ten reasons the SaaS on-demand model will accelerate in 2008.
• Gartner lists its Top Ten Strategic Technologies for 2008, and Web platforms such as SaaS are on the list. The Gartner report states, “Software as a service (SaaS) is becoming a viable option in more markets and companies must evaluate where service based delivery may provide value in 2008-2010.”
The growth of the SaaS model is closely aligned with another hot topic in IT circles: mobile access to critical business services. The SaaS model makes mobile access available wherever there is Internet service, which nowadays is just about everywhere. It also mitigates many critical firewall/security issues that must be addressed for access in a non-SaaS environment.
Watch for continuing momentum this year as the SaaS model becomes more widely accepted, and the big software companies push harder to play catch-up with a concept that has much more demand than they initially estimated.
