In his latest entry on ComputerWorld’s SaaS Revolution blog, Eric Norlin shows how the evolution of SaaScon reflects the maturation process of the broader SaaS marketplace. I think his commentary is right on.

When we launched the conference a year and a half ago, SaaS was still an embryonic market opportunity. Although Salesforce.com had proven its viability as a business, and there was a proliferation of start-ups and established players entering the market, it was still unclear how far the SaaS movement would evolve. It was also a movement of greater interest to the market participants than to potential customers. As a result, a large proportion of the attendees at our first SaaScon event were vendor representatives trying to get a handle on the business opportunity.

Our second SaaScon produced a broader assortment of speakers from a wider variety of vendors, but … Read More »

Since the holidays are traditionally a time for people to take stock of the year past and offer their new year forecasts, here are my top ten predictions why the shift from packaged products to Software-as-a-Service (SaaS), utility computing and managed services will accelerate in 2008:

1. Services are Recession Proof: Escalating oil prices, the uncertain political landscape and faltering financial institutions beset with the aftereffects of the sub-prime lending debacle could mean a tough year for the economy. In this tenuous climate, consumer and executive confidence could decline, leading to an economic slowdown. As a result, many companies could hold back on their capital investments to mitigate their risks. The ability to adopt on-demand services on a pay-as-you-go basis will be a perfect sourcing strategy for businesses seeking greater cost-controls and flexibility.

2. … Read More »

Anyone who has been in the networking industry for over ten years will recall when the term ‘new world service providers’ (xSPs) was coined to denote a new breed of carriers who promised to disrupt the telecommunications industry. Some of these xSPs were competitive local exchange carriers (CLECs), others were Internet service providers (ISPs) or hosting companies.

Although they emerged with plenty of fanfare and promised to deliver a broad set of powerful new data services, when the dot.com bubble burst the majority of these companies disappeared as the telecommunications industry fell into a long, dark, ‘nuclear winter’.

The recent surge in demand for web-based services has rekindled the original dreams of those xSPs who survived and is attracting a new generation of service providers hoping to capitalize on this new round of business opportunities.

Over the past six months, a series of … Read More »

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 … Read More »

IBM’s acquisition of Arsenal Digital Solutions is the latest transaction driven by the growing concern among businesses of all sizes that they have to do more to protect their electronic files in order to safeguard against natural disasters and satisfy escalating regulations.

What makes this trend even more interesting is that it has brought greater attention to the fundamental advantages of using a “hosted”, managed service to respond to these business concerns. This has made a widening array of storage, e-discovery and other managed service providers (MSPs) very attractive acquisition targets for an expanding assortment of potential buyers.

Here are a few of the acquisitions which preceeded IBM’s announcement,

Seagate $185 million purchase of EVault
EMC’s $76 million acquisition of Berkeley Data Systems Inc.’s Mozy storage service
Autonomy’s $375 million acquisition of email archiving service provider Zantaz Inc.
A series of acquisitions by Iron Mountain, including … Read More »

Utility computing is one of those IT industry concepts which has taken a long time to evolve into reality.

While discussions about this idea were mostly theoretical when it first emerged at the turn of this new century, today a new generation of players is turning the theory into an actuality.

After it helped to originate the idea, IBM is now trying to play catch up in the rapidly evolving utility computing market.

You can read my views about this ironic twist of fate on ITworld’s Utility Computing portal.

Last week, Dell made its second acquisition of a remote management services company in less than six months. After buying into the remote server management business with its acquisition of SilverBack Technologies in June, Dell expanded its remote management capabilities to encompass the desktop and mobile devices with last week’s acquisition of Everdream.

(A recent THINKstrategies whitepaper sponsored by Everdream gives some indication of how Dell will leverage the Everdream acquisition.)Both transactions are a part of Dell’s larger strategy to expand its product and service portfolio with a variety of automated solutions. The biggest of Dell’s recent acquisitions with this goal in mind was its EqualLogic purchase for $1.4 billion in cash, which will give Dell automated iSCSI storage area network (SAN) solutions optimized for virtualization environments.

While the EqualLogic acquisition dwarfs the SilverBack and Everdream buys, and has garnered far more … Read More »

Last week’s second annual SIIA On-Demand Conference was a bellwether for the state of the Software-as-a-Service (SaaS) industry. Rather than being composed of the usual suspects of SaaS speakers—Salesforce.com, Microsoft, etc.—the event included an interesting mix of prominent players and start-ups who clearly demonstrated that we are well beyond the ‘why SaaS’ stage and deeply into the ‘how’ phase of this important movement.

The event opened with a packed house of over 300 attendees, many with senior executive titles, and a relatively new name to the SaaS market presenting. Donald Proctor, the Senior Vice President of Cisco Systems’ Collaboration Software Group kicked off the event promoting its vision of the next wave of inter-office SaaS solutions based on WebEx’s collaboration platform which Cisco acquired in March 2007.

Although I might suggest that this wave of inter-office SaaS solutions is well underway and … Read More »

Over the past week, three Massachusetts-based companies have announced important developments which can serve as measuring-sticks for the Software-as-a-Service (SaaS) and managed services markets.

On October 31, Iron Mountain announced its intention to acquire Stratify, a leading provider of electronic discovery services for the legal industry and Fortune 500 legal departments. This announcement came on the heels of the Iron Mountain’s recent analyst briefing focused on its growing digital services business. THINKstrategies views these digital services as part of the broader managed services sector.

Iron Mountain has become a major player in the traditional physical records management in part because of its aggressive acquisition efforts. It has also established a solid foothold in the digital services market as a result of previous acquisitions of Connected and LiveVault. The addition of Stratify gives Iron Mountain a stronger eDiscovery capability to respond to escalating … Read More »

Many industry pundits and trade publications question whether Software-as-a-Service (SaaS) can penetrate large-scale enterprises because they believe it will fail to meet corporate procurement standards and satisfy escalating compliance requirements.

These concerns were echoed in a roundtable discussion within the SaaS cluster of the Massachusetts Technology Leadership Council this past Friday. At our monthly meeting, Eric Esperne, who is the President and Principal Consultant of James River Consulting, gave an in-depth assessment of the procedural hurdles SaaS vendors must face to win corporate approval from the procurement offices of major corporations and governmental agencies. Eric was an in-house attorney for MCI WorldCom and Cable & Wireless, as well as several small government agencies, for over 15 years. So, he speaks from experience.

Yet, THINKstrategies’ research and consulting work is finding that enterprises are not only getting more comfortable with SaaS from a … Read More »