The software industry is abuzz with talk about Services Oriented Achitectures and Software as a Service (SaaS). But the definitions vary considerably:
a) salesforce.com can justifiably argue its model and its boast "the death of (traditionally packaged) software" was right on
b) IBM with is recent Corio acquisition will repackage the ASP model (and rethink the capital intensive model that bled Corio out of over $ 200 m in capital and also likely banish Sun and HP gear from its customer base) across a wide range of applications. IBM expects to have 100 application vendors in its SaaS "enablement" program by next year.
c) SAP announced at Sapphire it was exposing 500+ web services entry points to its transaction engines. I got a quick demo and was told the number would triple in the next two years. Probably need a taxonomy tool to keep all that straight
d) Many BPO vendors are positioning their services as the ultimate SaaS
So across the spectrum of software, hosting and implementation/maintenance services - the SaaS models are quite different - vertically integrated like salesforce.com and some of the BPO offerings, less so with the others
The variety of definitions reminds me of client/server models in the early 90s. I remember the Gartner 5
definition model (remote presentation, distributed transaction etc). I also remember the mood swings some vendors went through as they rolled out client/server architectures. Oracle went from a character based user interface to its Smartclient to its Network Computing architecture in less than 3 years. The inside joke at Gartner was the Big "O" was not Oprah, but Oracle - thin, fat, thin...Who paid the price for this architectural thrashing? Customers.
Corporate buyers are right to be wary till robust (and winning) SaaS models evolve...they also need to be wary about economics. More than architectural re-engineering, the financial re-engineering in most software companies away from the cash-rich, upfront license and the margin-rich annual maintenance revenue stream will take some time.
Yes, corporate buyers are entitled to procrastinate and only opportunistically take advantage of SaaS
