Last week’s announcement by Salesforce.com that it had surpassed one million paying customers marks a milestone for the Software-as-a-Service (SaaS) movement, as well as the company.

THINKstrategies‘ latest industry survey in conjunction with Cutter Consortium has found a third of companies are already utilizing some form of SaaS to help them operate their business and meet their corporate objectives. Our survey found 100% satisfaction among these customers with their SaaS solutions.

This level of satisfaction is unprecedented. It is not only motivating current customers to acquire more SaaS solutions to meet their IT/business needs, but it is encouraging them to recommend SaaS to their peers. This is fueling the growth of SaaS in every segment of the software industry and across every segment of the market.

(Contact me if you’d like to be notified when these survey findings are published.)

While Salesforce.com’s milestone is the clearest example of the growth of SaaS, I was privileged to participate in an event in the Boston area this week which marked a different kind of milestone with a similar implication.

This past Tuesday, Hosted Solutions and the Massachusetts Technology Leadership Council (MTLC) combined with F5, Level 3 and Ping Identity to host a celebration of the recent IPOs of three Massachusetts-based SaaS companies–Athena Health, Constant Contact and Salary.com.

Anyone who has been a part of an IPO knows that this is an enormous accomplishment. A successful IPO is a clear indicator that you’ve built a business that is sustainable and a worthwhile bet for the future. The attendees of this week’s IPO celebration gained some useful insights and plenty of encouragement from the CEOs of the three honored companies.

Jonathan Bush of Athena Health, repeated his declaration from a previous MTLC event that “software is dead, dead, dead, dead!” He told the attendees that the key to SaaS success is to offer a ‘business’ service that makes the software invisible and satisfies a obvious problem at a lower cost and better quality than a user can accomplish on their own.

Gail Goodman of Constant Contact suggested that aspiring SaaS companies have to continuously iterate in order to find the right formula for success, but continuously focus on the quality of the customer experience from an ease-of-use standpoint.

Kent Plunkett of Salary.com offered ten ‘steps to success’ that centered on building a solid multi-tenant architecture, a consistent packaging and pricing model, and a strong service and support capability to ensure scalable, reliable, secure and satisfying solutions.

If more SaaS companies can adopt these best practices, the SaaS movement will gain even greater momentum and market acceptance in 2008.

Check out THINKstrategies’ SaaS Showplace to see how many companies are offering SaaS solutions by Application and Industry, as well as the enabling technologies which make SaaS possible.