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Will 2007 be the year of SaaS?

by Charlie Bess

Lately I’ve been seeing reports about software as a service (SaaS) satisfaction rates dropping, even though interest in using it continues to rise. This makes me wonder if the hype cycle is rising from the valley of despair as interest increases, but the satisfaction or understanding of what’s available in the market is still making the turn.

We’ve been talking about SaaS for a long time, so it could be that it is entering fad status. There are articles everywhere about Using SaaS for ERP, but the licensing has still not caught up.

Organization’s perspective and acceptance of SaaS as a cheaper and more agile method to deliver value seems to be on the increase. SaaS should allow large companies to leverage leading edge business application capabilities immediately, without the same level of understanding in-house about the technical complications upgrades or concerns about IT infrastructure demanded by traditional software delivery approaches. It should free them up to think about what differentiates them from the pack.

There seem to be claims that SaaS will cure everything that’s wrong in an organization's IT. There have even been efforts to create support groups for SaaS consumers. All of these seem a bit fad like to me, but there is always a hubbub of activity around the kernel of value for any fad.

Published Tuesday, February 27, 2007 2:35 PM

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Comments

# Posted by Rob Guzak Wednesday, March 07, 2007 6:43 PM

The seemingly contradictory market reaction (decreased satisfaction/increased interest) is pretty predictable.  Proponents of SaaS (in my experience) are looking for the mere installation of the software to address their business issues with little or no attention given to business process or organizational change implications.  Essentially what happens is that the user community either does not use it or does so suboptimally.  Interest will always be high in things that cost less (in this case, sometime dramatically less) for "non-strategic" applications (given that CRM has been one of the hotter SaaS domains, I am not sure how that qualifies as such).  Of course, integration and scalability can be problems as well, but, until companies stop viewing SaaS as a utility and view it as part of a complex solution, satisfaction will continue to fall.  Really not much different from traditional application deployment, is it?

# Posted by Mohan Saturday, March 10, 2007 7:57 PM

Interesting question.. Whether 2007 is a year of SaaS or not, we will definitely see a lot more innovative adoptions in the near future.

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