Rick McGee, IBM's VP of SaaS, opened SaaScon with a party -- and some remarks about the state of SaaS.
He figures 2006 will be a tipping point, a year in which, in retrospect, SaaS gained irrevocable prominence in the marketplace, based in part on the support for SaaS by important vendors like SAP, Oracle, and Microsft, all of whom have SaaS initiatives now and are expected to have more in the future.
He also pointed to important acquisitions and mergers, like the purchase by ADP of SaaS HR firm Employeez, as well as to IDC's predictions of 20% per year growth into the foreseeable future. SaaS is now estimated to be a $13 billion market.
McGee likes the catchphrase "The Invisible IT Market," because it points to how SaaS expands traditional IT functions. It's all about removing complexity from the acquisition, implementation, management, and operation of IT.
Think of it as a Consumption model of IT with buyers willing to give up architectural decisions in return for solutions and guaranteed service. Customers don't want to select hardware, middleware and software, they want to buy solutions.
McGee says there are winners and losers in this model:
Large enterprises with failed ERP deployments
SMBs who couldn't find the right value proposition for complex software -- or the resources to implement or manage it
Providers who have a new business opportunity in SaaS
Traditional IT firms that can't change
(Editorial note: I'd add customers who don't take advantage of outsourcing applications with no competitive advantage.)
With this much going on at a Sunday night party I can't wait for the fun to begin tomorrow!