The Three Es That Will Drive On-Demand Services

Posted on September 22nd, by thinkstrategies in cloud computing, On-Demand, SaaS,, Software-as-a-Service. 1 Comment

The financial crisis which came to a head last week may only be the latest chapter of an ongoing saga, but it is certainly going to be another driver that will push the on-demand services movement to a new level of market acceptance and growth.

In December 2007, I predicted that the Software-as-a-Service (SaaS) market would not only survive a deepening recession but would grow because of it.

My prediction was based on the premise that financial uncertainty would compel organizations of all sizes to adopt procurement policies which would favor the more flexible pricing model and more rapid deployment capabilities of SaaS, rather than continue to make significant capital investments in traditional on-premise software and systems with long deployment cycles and limited odds for success.

Ten months later and the economic climate has only gotten worse. Spiralling gas prices have compounded the severe financial issues surrounding the subprime mortgage mess that caused the extraordinary events of the past few weeks.

I’ve been on the road nearly every week this year speaking at industry events or meeting with corporate clients. The IT/business decision-makers I’ve met have all confirmed that they are adopting SaaS and cloud computing solutions to address a widening array of IT management and business requirements. The SaaS and cloud computing vendor executives I’ve talked with have also seen a significant rise in adoption of their on-demand solutions.

Add to the economic and energy concerns, rising recognition among business executives and end-users that we all have to be more concerned about the ecology, reduce our carbon footprints and go ‘green’.

So, here are the three key drivers for continued growth of the on-demand services market,

  1. The turbulent economy
  2. The rise in energy costs
  3. The fragile ecology

The Three Es.

PS: Another indicator of the fundamental shift in today’s business climate is the addition of to the S&P 500, replacing Freddie Mac.

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