The service disruption which Salesforce.com experienced this week came at a bad time for the Software-as-a-Service (SaaS) and cloud computing market.

Although I believe the long-term prospects for SaaS and cloud computing remain strong, there are plenty of short-term challenges facing SaaS and cloud computing vendors in today’s tough economic environment.

Salesforce.com’s outage reignites the debate about the reliability of web-based services, and will intensify the concerns of those IT and business decision-makers who have been reluctant to adopt on-demand solutions.

It also validates the claims of legacy software vendors that SaaS and cloud computing are not viable platforms for enterprise applications.

The ultimate irony is that the public website which Salesforce.com created after it experienced a series of outages in 2005-2006 to demonstrate greater accountability, www.trust.salesforce.com, also went down during the latest outage.

In 2006, Salesforce.com was quick to turn its problems into marketing opportunities. This time there is even more … Read More »

I’m sorry to see that the new year and today’s severe economy crisis haven’t rid the technology industry of old, outmoded thinking.

One of the most recent exmples is a blog post by ComputerWorld’s Mark Everett Hall entitled, “How SaaS Hurts a Fragile IT Economy”, in which Hall suggests that Software-as-a-Service solutions represent a threat to both IT professionals and the technology industry because SaaS commoditizes traditional, on-premise IT systems and software applications.

Of course, what Hall fails to recognize is that customers are migrating to SaaS, as well as a broadening array of cloud computing services, because legacy systems and applications failed to fulfill their promises or justify their costs. And, in today’s economic environment and rapidly changing marketplace, few companies can continue to accept the exorbinant costs, complexities and risks associated with legacy apps and systems.

In contrast, SaaS and cloud computing are proving to … Read More »

THINKstrategies launched a new awards program today aimed at showing how Software-as-a-Service (SaaS), cloud computing and other on-demand services are helping organizations of all sizes across every industry grapple with the operational challenges created by today’s unprecedented economic crisis.

The new Best of SaaS Showplace (BoSS) Awards are aimed at promoting the tangible benefits which web-based services can deliver.

The awards will be given to SaaS and cloud computing companies listed on the SaaS Showplace which can demonstrate that their on-demand solutions have produced measurable business benefits for specific user organizations. These benefits could be increased sales, lower costs, higher customer satisfaction, faster operations, etc.

Click here for more details regarding the nomination process, criteria for selection, fees and award program benefits.

Happy New Year!

Let me be the first to offer predictions for the on-demand services market on this first day of 2009. These predictions are based on THINKstrategies’ latest survey research and ongoing consulting work with IT/business decision-makers, IT solution providers and various technology investors.

I recognize that plenty of predictions have been made already, but hope mine offer a different perspective on the future direction of the on-demand services market.

Contact me if you’d like to discuss or debate any of these predictions.

On-Demand Services Move From Why … Read More »

VC problems could slow SaaS, cloud computing and on-demand services market growth.

My friend Phil Wainwright’s latest blog post re: LucidEra’s new pre-sales program, Pipeline Healthcheck, confirms many of my initial observations when the company first introduced the program in October. Phil’s post includes a number of interesting stats which LucidEra’s founder, Ken Rudin, also shared with me at Salesforce.com’s Dreamforce event.

LucidEra’s decision to move away from the typical free-trial approach to selling SaaS is significant because it exemplifies a subtle trend which is brewing in the on-demand services market.

Although many SaaS solutions can be sold using a ‘try and buy’ technique, a growing number of SaaS vendors are discovering that they must employ other sales tactics to sell their solutions. In some cases, like the LucidEra example, it is because they are trying to demonstrate the power of their functionality to a target buyer who is unfamilar with the basic idea. … Read More »

I’ve just returned from my last business trip of the year. This time I was in Washington, DC, hosting the Software-as-a-Service (SaaS), cloud computing and managed services track of NetworkWorld’s IT Roadmap event.

The keynote speaker at the event was Bechtel Corporation’s CIO, Geir Ramleth, who gave a fascinating talk about how his IT team is transforming the way Bechtel leverages technology and business applications by modeling their operations on YouTube, Google, Amazon.com and Salesforce.com, rather than traditional enterprise organizations.

Ramleth has recognized that these on-demand service providers are delivering high-value solutions in an amazingly low cost fashion, making them the envy of CIOs at many of the greatest companies in the world.

Although Ramleth’s team has decided that today’s commercially available SaaS and cloud computing solutions don’t meet their corporate requirements, they still felt the operating model of today’s on-demand service providers … Read More »

Given the proliferation of Software-as-a-Service (SaaS) and cloud computing players over the past year in response to the rapid rise of customer interest and demand, it was easy to predict that a shake out in the on-demand services market was inevitable. The question is whether today’s turbulent economic environment will accelerate this shake out process and kickstart a series of mergers and acquisitions heading into 2009.

One school of thought is that many of the weaker players in the on-demand services market are not mature enough to attract buyers and, therefore, the volume of acquisitions will not be any greater than normal.

Compounding this situation is the fact that many potential acquirers are facing their own financial challenges and lack the currency to take advantage of a “buyer’s market” and make acquisitions.

I’m not an expert in the art and science of M&As, … Read More »

I’ve been suggesting for a few months that the Software-as-a-Service (SaaS) and ‘cloud computing’ market has been experiencing a ‘gold-rush’ era of accelerated growth. The rapid adoption of SaaS solutions was confirmed by THINKstrategies’ latest survey in conjunction with Cutter Consortium.

Just like in the original gold-rush of the 1800s, today’s ‘cloud-rush’ is not only attracting a proliferation of players, but also an assortment of unsavory characters.

The scandal surrounding IT Factory of Denmark is the most recent example. If you haven’t been keeping track of this one, it is worth reading about. The company’s CEO, Stein Bagger, disappeared before Thanksgiving after financial ‘irregularities’ were discovered at his company and a half billion kroner were found to be missing from the company’s bank accounts. Bagger is presumed to be hiding out in Dubai, and his company has fallen into bankruptcy.

The scandal doesn’t … Read More »

Today’s deepening economic crisis is testing the mettle of IT/business decision-makers, IT solution providers and technology investors alike.

IT and business decision-makers in nearly every industry must make cuts to their capital and operating budgets in order to offset rapid declines in business and tightening credit markets. In many cases, this is forcing them to fundamentally reevaluate the way that they acquire and utilize technology and business applications, and leading them to seriously consider various on-demand service alternatives such as Software-as-a-Service (SaaS), cloud computing, and managed services.

I have recently suggested in commentaries in Datamation and the Business Technology Roundtable that any IT/business decision-maker who isn’t seriously considering these on-demand alternatives is doing their organization a disservice and could be jeopardizing their jobs.

THINKstrategies’ latest customer survey in conjunction with Cutter Consortium clearly shows that organizations of all sizes are adopting SaaS solutions … Read More »