As more companies launch free, ad-based, online services, the debate about their long-term effectiveness grows. Two Software-as-a-Service (SaaS) companies have recently unveiled new, innovative approaches to circumvent the controversy and create new value for customers and sponsors.

The debate revolves around two quesitons. The first question is whether customers will take advantage of these services if they have to put up with a user-interface cluttered with banner ads or search engine listings. The second question is whether the services will generate enough qualified leads for the sponsors to justify the marketing expense.

Klir Technologies is an on-demand IT management solutions vendor which is offering a free, on-line performance measurement service to enable enterprises to improve the reliability of their data center operations. Rather than simply include a Google search engine which produces a listing of potentially competitive IT management solutions, Klir unveiled in September its Analytics 3.0 Beta service which is being financed by a growing array of content providers who are supplying ‘best practice’ information users can leverage to better interpret and act about the data generated by Klir’s service.

In addition to providing users with greater value, Klir’s new service turns the traditional vendor/publisher relationship upside-down. In the past, vendors paid to advertise on publishers’ websites. Now, publishers are adding their links to Klir’s website to drive traffic to their sites.

Today, BlueTie unveiled a free online email and calendaring service which could also disrupt the traditional ad-based approach. The company is enlisting a variety of partners, including Orbitz, who’s on-demand services will be integrated into BlueTie’s already robust business-class webmail and calendaring capabilities. Using patent-pending programming, BlueTie’s new service suggests third-party services based on the user’s activities.

For instance, when a user makes a calendar entry for an appointment in another city it will prompt an alert from Orbitz offering a list of the available airline flights, hotels and car rental services for that destination. ‘Mashing up’ BlueTie’s online calendar with Orbitz’ online travel services not only reduces the number of clicks a user needs to make in order to fully prepare for each appointment, it also creates a new online transaction relationship.

In both of these cases, the SaaS vendors have admitted to me that they are uncertain what proportion of users will convert from the free services into full subscribers of their on-demand services. But, they are confident the new business models they have created could generate sufficient short-term revenue and long-term value to make them self-supporting.

These are just two examples from a rapidly growing array of innovations which are clearly demonstrating that SaaS isn’t about offering cheaper on-demand substitutes to traditional on-premise applications. Truly innovative SaaS providers are creating onlines services which redefine the way users perform their day-to-day work and reshape the way business partners structure their relationships.