Software as a Service
Software as a service (SaaS) is an important sub-theme that relates to our overall view of both Enterprise 2.0 and Cloud Computing. SaaS is part architecture and part delivery and usage model. SaaS also creates opportunities for open source software.
Although the maturity level of many current SaaS offerings is fairly low in enterprise terms it's clear from leaders like Salesforce.com and broad market adoption trends that companies of all shapes and sizes will be moving to SaaS for a signficant number business processes and application types.
From an investment standpoint SaaS models, particularly hybrid ones present some valuation challenges. The hype around SaaS has also supported the launch of many ill-conceived ideas that are touted for their SaaS model and little else. Functionality, architecture and business model sustainability matter just as much in a SaaS approach as any other.
The lines in this space are also blurry since service providers like PayChex can certainly be thought of in a SaaS context. Many of the established software vendors, most notably Microsoft, are retooling and marketing many of their features as being available in SaaS flavors.
It's still very early in this market and the number of public will expand. This month we are focused on NetSuite (N) and their forthcoming IPO. Our full report will be published around the time their offering is priced.