10 Predictions for the Future of SAAS and On-Demand

10 Predictions for the Future ofSAAS and On-DemandBy Chris Preimesberger

10 Predictions for the Future ofSAAS and On-DemandDemian Entrekin’s PredictionsDemian Entrekin is the CTO of Innotas, which makes an on-demand Project Portfolio Management package specifically designed for IT organizations. Innotas’ customers include Forbes, Hamilton Beach and Simon & Schuster. Entrekin shared with eWEEK his impressions on the future of SAAS, cloud computing and on-demand applications.

10 Predictions for the Future ofSAAS and On-Demand1. Software Without BordersApplications will become less and less restricted to a particular organization and more oriented around user networks. This has the effect of making the applications more user-centric rather than organization-centric. Paradoxically, this is good for the organization, since it will lead to better adoption.

10 Predictions for the Future ofSAAS and On-Demand2. It’s the Product, Stupid!Due to the emphasis of “Try It, Buy It” approaches to marketing SAAS, product management and product marketing teams will be forced to push more of the “whole product” and “solution selling” concept back into the product itself. The product needs to incorporate business processes into the product features.

10 Predictions for the Future ofSAAS and On-Demand3. First Impressions FirstSAAS applications have only a few minutes to make an impression. I like to focus on the first 3 minutes. If you can create a sense of value in 3 minutes, you’re off to a great start. That said, you’d better also focus on the first three years, so you don’t poop out after three days.

10 Predictions for the Future ofSAAS and On-Demand4. Pinching PenniesCOGS (cost of goods sold) and gross margins are financial metrics that should drive the technology strategy; as W. Edwards Deming might have predicted, the ability to support a reliable, scalable service at a low cost is a bigger and bigger advantage.

10 Predictions for the Future ofSAAS and On-Demand5. Tier 1 Support ReignsNow that there is less and less room for fancy, high-priced consultants to answer the fancy, high-priced questions, Tier 1 support will take on a bigger and bigger responsibility to represent the company and answer tough questions. Will a good FAQ cut it? I doubt it.

10 Predictions for the Future ofSAAS and On-Demand6. Product AlliancesSAAS vendors will dedicate more resources to integration partnerships with other SAAS vendors. Right now, they talk about it but they don’t do it very well. This may be the best answer for the elusive “channel” for SAAS vendors. SAAS doesn’t have enough pork for the traditional channels.

10 Predictions for the Future ofSAAS and On-Demand7. Video Trumps TextSAAS products will begin to use more and more video for training, support, documentation and so on. It’s cheap and easy and more interesting to watch. Text-based tools are being replaced by A/V.

10 Predictions for the Future ofSAAS and On-Demand8. SAAS for SAASSAAS companies will start outsourcing more and more parts of their own operations. This is important because they can get the same kind of leverage from full-service hosting providers that they provide to their customers. These kinds of arrangements will also lead to natural SAAS aggregations of applications into end-to-end partnerships.

10 Predictions for the Future ofSAAS and On-Demand9. Grid Computing MuddleUtility computing remains an open question and will be driven by the cost of providing the service. In some cases, you may be able to get your monthly operating costs per user down to a low-enough price that grid computing won’t offer enough of a benefit. In other cases, it might provide just the kind of cost advantage that makes it worth the effort. In either case, SAAS vendors should build applications that are “cloud compatible,” so that they can take advantage of grid computing when it makes good risk/reward sense.

10 Predictions for the Future ofSAAS and On-Demand10. Tech Takes a Back SeatThere are fewer technical hurdles to get a SAAS application to market than when we started this in 1999. Now the emphasis is shifting more to marketing strategy; the technology, while obviously essential, is taking more of a back seat.

Getting Virtualization Right-