SaaS will surge in 2008

Phil Wainewright has written an excellent blog entry Eight reasons SaaS will surge in 2008. The entry is positive but still the key needs will be to overcome objections of on premise IT thought leaders in conjunction with the reliability and quality of SaaS enabled applications. Among those objections, I believe high on the list will be the perception of loss of control through not owning the infrastructure out right.

One perceived way of giving some control to the on premise guys, that I’ve previously talked about, is the Customer Premised Cloud. But this may increasing be relented to the "nice to have" basket as Economic factors drive the expected cost down to provide services.

Current savvy enterprise buyers know how to reduce buy prices, but they are now pushing the margins down on channel participants, especially VARs to under 2%. As there is not much more to go here, what are these buyers going to do when the next mantra comes down to reduce capital and operating expenditure by 10%? Well, I hope its going to drive the demand for SaaS.


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