It’s no surprise that enterprises may prefer on-premise solutions since they have the up-front resources and infrastructure available. I think SaaS may be a much more attractive model to SMBs since there are low barriers and initially require fewer resources–a low-risk solution. SaaS may not fully replace on-prem, but this is why some SMBs may want to hunt out companies that provide a scalable solution where the smaller company can “grow” from hosted into licensed software as their business grows.

The connection between SaaS and the Cloud , is applications that are actually designed to lower the TCO and integrate into business processes.

A lot of whats going in the Cloud was designed for onprem, hacked into something that could be hosted, then stuffed onto a single instance.

You can cram an orange into a glass but that doesn’t make it OJ, and it will confuse those non US / non EU folks on how to drink it

Is this not purely a matter of time?. Hasn’t Europe generally had a lag behind the US on adoption of SaaS – therefore isn’t this a safe assumption that this is true for other countries? There may even be an advantage of watching from the sidelines while we iron on the kinks and they then don’t fall into any of the pitfalls we have done.

The TCO question will only be addressed in time – but with time also comes potential advantage, especially as SaaS gives you the ability to get up and running quickly – so will this widen the gap of innovation & competition?

I think one of the key things you mention here again is integration – more specifically, linking the old internal legacy world to the new shiny world of SaaS based solutions. Who and how this is done, is yet to be proven – many large SI’s have already backed some of the leading SaaS vendors – it may be interesting to compare their revenue streams for SaaS vs. traditional solutions, or for the SI’s is this too close for comfort to their BPO business?

It’s going to be an interesting and exciting few years ahead!

Interesting and well written post.

I will agree with the concept of SaaS in spirit. Deploying and fixing software is a no-brainer, and almost no-coster, for customers. No matter where in the world they are located they can, in theory, access the latest and greatest of everything pretty much. Growing up in Argentina we measured how far we had progressed by the delay between the releases we saw in the magazines and when they arrived to us. Less than 2 years for hardware and 1 one year for software would have been a dream almost. We used to get most everything by someone who came to the states and could bring it back.

That does not change (ok the lead time does, is way shorter now – but the feeling of being behind not much).

However, the problem is SaaS remains, as you pointed in your post, integration and the ability to work with the rest of the organization. This is not going to change anytime soon – if at all – and that remains a huge barrier for companies in other parts of the world where they measure progress by how well they can leverage what they already have when they move to a new product – as well as that new product to solve as many problems as possible. That will remain in my eyes the key to SaaS having low adoptions in other worlds outside of US/EU.

A couple of things: I agree with you. I’m really looking into the specific regions outside of US/EU where SaaS is much less evolved. But you also hint at another big issue: the relative weakness of the systems integration firms and large business consultancies in the SaaS area. And the awareness of five-year TCO for complex environments is not well understood by CFOs.

Good comments.

Even those applications that are totally unique and provided in house are bound to move from a distributed architecture to single instance, remotely hosted code.

The cost benefits in terms of development, distribution and maintenance are so huge even the most ardent client/server fans will eventually be forced to adopt the new technology.

The internal IT guys are never going to see it though. Turkeys don’t vote for Christmas.