The Emergence of the Cloud and SaaS Applications into the Market Mainstream

Here is a discussion on a key trend that within the CRM marketplace: Cloud computing and SaaS applications are rapidly moving into the enterprise-wide CRM marketplace. 

CRM software vendors are increasingly offering CRM software solutions via the Software as a Service (SaaS) model, which is also referred to as Application Service Provider (ASP), on-demand solution or the cloud ”(Internet-based computing, whereby shared resources, software, and information are provided to computers and other devices on demand) is accessible from work, from home, from any location with an Internet connection, and increasingly, from our ever-smarter mobile devices.”

A 2008 IDC report predicted that many software companies would derive a majority of their revenues from subscription agreements rather than perpetual licenses by the end of 2011.  This outlook for the SaaS model contrasts to the late 1990s when a host of startups began offering ASP applications over the Web.  Many of these startups went out of business because companies were hesitant to let outside companies run their important applications and because integration toolsets were not sufficiently robust. However, in the past few years, large and small companies have become more comfortable with SaaS.  The SaaS model can circumvent traditional problems with the client-server model including high prices, cumbersome deployments, and the inevitable software upgrades.  A 2008 Gartner Group report projected that during the next four years, half of the software sold to companies would be paid for on a monthly basis as part of a long-term contract, as a monthly rental fee, or as a pay-per-use basis. Research company Saugatuck furthermore predicts that by 2011 at least 65% of US companies will be running at least one SaaS application.

For your information: here is an article about four Cloud and SaaS Application Firms Worth Watching.

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