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This post comes from ERP Market Analyst Derek Singleton of Software Advice. To view the full article, visit their blog at It’s Not About the Web Browser.

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Most people tapped into the enterprise software community know that SaaS is the hot new thing – VC’s sure have dumped boat loads of money into the cloud computing phenomenon. And for good reason, the SaaS business model and approach to software completely changes the dynamic of enterprise software.

Much attention around cloud computing has focused on the innovation of a Web-based architecture. In the race to compete against SaaS companies, many legacy vendors with older client/server offerings have evolved their technology to offer Web-based deployment.

But the innovation of SaaS isn’t just about Web access to software. I can think of five other reasons that SaaS is disrupting the traditional in-house IT market:

1. Cloud Companies Attract Hot Talent - Highly talented people like to go where they feel appreciated and think they can make a difference. In addition to providing the opportunity to work for a small company and have your ideas implemented, SaaS companies have a culture innovation and a mission to grow.
2. Multi-Tenancy Simplifies Development - Building on an multi-tenet architecture makes the development and deployment of software much faster and easier. Where it might have taken a couple of years for legacy vendors to get all their customers to convert to a new version of software, SaaS is able to do it in a day.
3. SaaS Makes Buying Software Easier - Purchasing enterprise software is known for being a difficult process that’s accompanied by complex pricing schemes. SaaS providers eliminate most of that by publishing their prices, allowing credit-card purchasing, and offering free trial downloads to interested buyers.
4. The User Experience is an Obsession - The user experience takes center stage in the SaaS development model, after functionality of course. These companies have learned their user experience lessons from growing up with the Web, and they seek to make their enterprise software experience similar to searching through Google or using Amazon.
5. Younger Employees Get the Web - Many of the employees of SaaS companies grew up with the Internet. As a result, they’re familiar with the way the Web works and understand how to use it for sales and marketing. They aggressively pursue Web marketing tools such as SEM, SEO, and lead generation. Since more buyers are flocking to the Web for information, SaaS companies are in the right place at the right time.

The innovation of Web access is certainly a point worth commenting on, but it’s not the only thing that’s disrupting enterprise software as we know it. Of course, this is just my opinion. What are your thoughts?

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Tags: cloud

This entry was posted on Wednesday, August 31st, 2011 at 2:48 pm and is filed under Entrepreneur Inspiration. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.