SaaS as the New Paradigm

May 10, 2010
Salt Lake City, UT

Tomorrow in New York, Microsoft is releasing its latest edition of Office 2010 Web Apps which, in my mind, will mark Microsoft's full acceptance of the SaaS software delivery model. Furthermore, Microsoft's development of web applications for the cash cow that is MS Office, officially shifts the standard from legacy software to SaaS.

In an interview with USA Today, Marc Benioff, the CEO of said, "We're entering an entirely new paradigm." This new paradigm is one where businesses and consumers alike are no longer bound to physical locations or forced to use complex technology to manage networks and files but freed to move about freely in the clouds. About this paradigm shift, ECM chief executive Joe Tucci said, "We're now going through what I believe is pretty much going to be the biggest wave in the history of information technology.''

The Shift

This technology shift, started by Salesforce (who commercialized SaaS), Google (who brought SaaS to the consumer), and Facebook (who made SaaS a way of life), among others, has been christened by the full-fledged acceptance by Microsoft. Microsoft's Steve Ballmer said, "This is the bet for the company, [and] for the cloud, we're all in."

Though Microsoft has fallen behind in the SaaS and cloud market over the years, it will be interesting to see how their entrance into web applications will affect other products; will Office web apps mark the beginning of the end to the rise of Google Docs? Or will it go down as another Zune: a failed attempt to catch up to its competitor? Will businesses rapidly upgrade their Office Suite to 2010? Or will take this time to look at other alternatives? Though the answers to these questions remain to be seen, I personally believe that there is much excess capacity in this growth market and that a large number of companies will get their piece of the pie; however, the SaaS providers are not the true winner in this movement. The true winner is the consumer, the IT manager, small business owner, and the typical employee at a large company.

Who Benefits?

Consumer -- The consumer is not only a winner, but the consumer is the one ignited the SaaS/Cloud movement by their adoption of web apps such as Facebook, Twitter, Gmail and Skype that are not only nice and fun services, but have become ways of life for millions of people.

IT Manager -- No longer do IT managers need to deal with the hassle of legacy software as the maintenance and upkeep will be done by the provider. The IT manager now can focus on servicing the people in the organization and make sure the software is being optimized within the organization.

Small Business Owner -- Due to the scalability and pay as you go model followed by SaaS, a small business owner can level the playing field by using the very same technology that the large companies use. With NetDocuments for example, a 3 lawyer law firm uses the exact same product, from the exact same code as the lawyers at an international firm with thousands of lawyers use.

The Employee -- Wouldn't it be nice if the benefits that we as individuals get in our personal life from SaaS offerings were available in the workplace? That dream is now a reality for millions of workers who now interact with fellow employees, collaborate and share documents, and service clients not only from within the network or through some confusing remote connection, but from anywhere in the world using innovative web-based applications like Salesforce, NetDocuments, Advologix, Google Apps, Office Web Apps, etc

The New Paradigm

The SaaS paradigm allows lawyers, investment advisors, accountants, etc, the freedom to not only work from anywhere but allows them to collaborate on cases, reports and contracts seamlessly and efficiently without the need for FedEx, pin drives or a confusing mess of various email attachments. It also allows them to go to a marketplace like Google's or Salesforce's and find all the tools needed for their business in one place.

SaaS has matured, and the stage where IT people and business could sit back and observe the market develop has passed, those still in that mode are getting left behind, it is now time to accept a shift in paradigms and embrace the cloud as the standard.