SaaS For Everyone?

Software-as-a-Service (SaaS) systems are technically limited by many factors, not the least of which is the browser environment. While the expansion of broadband and new technologies such as AJAX give developers capabilities they did not have just a few years ago, major issues remain - from security to integrations with mainframes and other legacy applications. Further, SMBs are an underserved market for what have traditionally been enterprise applications, but that does not mean they don't want the benefits of Business Intelligence, CRM, ERP, etc. like the big guys. It is that typical enterprise implementations for an SMB are often like swatting a fly with a 2x4. While the problems are agnostic to company size, the scope and depth are quite different. It is easy for a home cook with some skill and decent equipment to prepare a great meal, but doing that everyday, multiple times/day, for a few thousand people, as on a cruise ship... that's an enormous challenge. That is what any good enterprise-level application is designed for. In addition, SMB's tend to lack critical components to successful in-house IT implementations:

• IT and business-related human resources to plan, execute, tweak, maintain, upgrade, etc.
• Financial means
• Technical Literacy

The beauty of a SaaS system is the need for all of those components is either reduced, or even eliminated. Cost is also often sited as a significant benefit of SaaS systems. However, according to Forrester, by the third year of deployment on average, the cost of a hosted application starts to exceed that of an in-house licensed application. By the fifth year of a deployment, the cumulative cost of a hosted application is estimated at more then $1.6 million, while the licensed software costs about $1.4 million annually.

So why wouldn't a large enterprise want SaaS?