Predictions for SaaS in 2007

Phil Wainewright concludes his Dec 22 post with:

This is the second of three articles in which I'm making predictions for SaaS in 2007. What are your predictions?

Making up stuff that might happen in the future is a big hobby of mine, I will go as far as stealing a page from the analysts book and add probabilities. :)

Here is my list, in 2007...

#1: The level of SaaS awareness and maturity will accelerate to the point where there won't be massive debates including hundreds of posts, trackbacks and comments trying to define what it is. It won't be software as a service anymore, it will be "just" software. The same way that it is not object oriented programming anymore, it is "just" programming. (0.5 probability in 2007, 0.8 in 2008)

#2: SaaS will be an integral part of the enterprise SOA. In their continuous effort of optimizing IT, enterprises will source part of their IT service portfolio from outside the corporate firewall. Fostering a new type of hybrid "on premise" - "in the cloud" architecture (a.k.a. Software + Services or S+S architecture). This will lead to more sophisticated SaaS solutions (see #3) (probability 0.7)

#3: To sell to enterprises (as opposed to the long tail) SaaS solutions will become more sophisticated, supporting single sign on (probability 0.7), web services based integration APIs (probability 0.7) and expose management events (probability 0.4). Putting multi-tenancy as a non-relevant feature for selling SaaS (but still very relevant for building SaaS).

#4: There will be an increased focus from hosters to expose a SaaS hosting platform, facilitating the on boarding process of ISVs. The process will evolve from a professional services heavy / ad-hoc process to a more declarative process where the hosting requirements will be partially described by a markup language, giving birth to the SHML (pronounced shomel) i.e. SaaS Hosting Markup Language :) 

#5: Big established players (which current startups are making fun of) will enter the SaaS space with more complete offerings. For example, these offerings will allow multiple deployment options (on premise, hosted, as a service), will offer both browser and rich/offline UI access, and will be well integrated to their current offering; overall raising the bar for what a SaaS solution needs to be. Many existing SaaS players will need to step up or loose competitiveness. (probability 0.6)

#6: Client side mash-ups will still grow, but mainly in the consumer space where guarantees are not a top requirement. In the enterprise space, mash-ups will tend to happen on the server side where SLAs of "mashed-up" solutions will be offered. (probability 0.7). Leading to #7.

#7: Everybody will want to be an aggregator,  hosters going up the stack, ISVs enlarging their offering, outsourcers moving sideways, enterprises trying to become critical hubs in their value networks... all will try to establish themselves as the service aggregator, hoping to become the Walmart of software. (probability 0.5).

#8: A tension between own brand vs. white-labeling will emerge in the software industry, the same way it exists in the consumer goods - large distribution industry. (probability 0.4).

Bonus prediction: A lot of very cool stuff will be released by the Microsoft architecture strategy team on this MSDN site. (probability 0.999) :)


After reading these predictions I realized that I am probably a bit too bullish on SaaS. But hey, this should not be a too big of a surprise.


As usual, comments very welcome.