Saas in 2008 and beyond

Though Phil Wainewright predicted last year (2007) that 2007 would be year for SaaS. Though SaaS did gain momentum but it did not penetrate enough so that one could say that there has been a major shift. At the start of this year (2800) Phil Wainewright predicted a huge surge in the SaaS industry. I agree with him.

Phil observes that the main reasons for the surge are

SaaS is a service based industry. SaaS makes it easy for teams that are spread apart to work together without huge setup costs as web allows you to do that. Over the years the SaaS detractors have decreased because SaaS model is making sense.
Software vendors are shifting to SaaS. Software vendors are adopting SaaS. SAP and Oracle are one of the few software vendors who have shown keen interest in the SaaS model.
Economic conditions. With the fears of recession plaguing the world organizations are switching are looking for cheaper options for the expensive software they use. Since SaaS is a pay as you go model it seems like a good alternative as long as ISV’s can deliver.
Growth of SaaS platforms. There is a race for SaaS platforms. Earlier this year Genesis was launched as a platform for SaaS at the SaaS week. Companies like Oracle and Microsoft are in the process of making their products SaaS compatible which suggests that they also see a growth potential in this field.
Growth of virtual working. Increasingly people are working from different locations which will help boost SaaS development as it provides a cheap way to work from different locations.

Phil Wainewright’s article which has greater detail can be found at http://blogs.zdnet.com/SAAS/wp-trackback.php?p=432. Another respected commentator on IT trends Jeff Kaplan has another post which outlines the reasons why SaaS can be successful which makes interesting reading.