I had the privilege of participating in Opsource’s SaaS Summit March 1-3 at the Silverado Resort in Napa Valley, CA.

The event brought together everyone from the 800 pound guerilla of the Software-as-a-Service (SaaS) industry–Salesforce.com–to an assortment of neophides still formulating their SaaS strategies and solutions. The attendees and speakers included system vendors like IBM and Hewlett-Packard, software vendors like Microsoft and Business Objects, as well as many of the top venture capitalists and investment bankers focusing on the SaaS market.

OpSource’s senior executives and marketing staff deserve praise for not only taking the bold step of hosting this industry event, but having the skill to pull it off in first-class fashion. The company has aggressively asserted itself as a pivotal player in the SaaS market by not only organizing the Summit but also evangelizing the business benefits of SaaS and establishing a ‘best practices’ based consulting practice and incubator program to help ISVs adopt the SaaS model.

Here are some of my observations from the event:

• Bobby Napiltonia, SVP of WW Channels and Alliances at Salesforce.com, opened his keynote presentation with a videotaped interview with Tom Friedman, author of “The World is Flat”, evangelizing about the virtues of SaaS. With Friedman onboard the SaaS bandwagon, those corners of Corporate America who haven’t already recognized SaaS’ business benefits will take a closer look.
• The SaaS market is entering the ‘gold-rush’ stage, as it gains acceptance in almost every segment of the market and players from nearly every vantage point in the IT industry are seeking to capitalize on the opportunity.
• Salesforce.com is the epicenter of the market and AppExchange is a key channel to market, but it hasn’t captured the market completely because there are plenty of non-CRM/SFA SaaS opportunities.
• Salesforce.com is also quickly moving from evangelist/savior of SaaS to potential behemoth/bad guy a la Siebel vs. Oracle in a previous era. The company’s size and recent system outages has created apprehension about its market power.
• The key lesson of Salesforce.com and AppExchange is ‘ecosystems’. In addition to partnerships and ecosystems being a common theme of the event, the Summit was a demonstration of OpSource’s own growing ecosystem and increased significance within the SaaS market. SaaS players that fail to build broad-based partners will fade away.
• IBM and Microsoft understand the SaaS market dynamics and importance of ecosystems, and they are focusing on enabling SaaS as much as offering proprietary SaaS solutions. (HP was a sponsor–but not a speaker–at the Summit, pushing its server products at a table-top display in the exhibitor area and failing to tell the attendees where the company stands in the SaaS market.)
• There isn’t one definition or business model for SaaS. Customers have varying requirements, ISVs have varying capabilities, and applications can come in various flavors yet still satisfy the overall goals and intent of SaaS.
• As a result, many SaaS providers are still trying to determine how to package, price, promote, sell and deliver their solutions profitably.
• ISVs who are attempting to add SaaS to their portfolios or migrate entirely to a SaaS model face the greatest hurdles as they adjust to the transaction-oriented, subscription-based pricing model, especially when it comes to sales compensation strategies and structures.

You can read more about my views re: SaaS ecosystems on ITworld’s Utility Computing website.