“Outside of lower costs, three other developments have helped make software as a service much more attractive. First, developers have created new applications that have been engineered from the ground up to be offered as a hosted service and even many existing applications have been re-engineered to make them more “hosting-friendly”.
Second, the advent of XML and web services has made it easier for companies to integrate hosted applications and data into their own legacy systems. From a technical perspective, this has removed one of the last major drawbacks of hosted software. And finally, 10 years of exposure to the web has made many corporate managers much more comfortable with the idea of hosted-applications. Even many IT managers, who at first resisted hosted applications as a potential threat to their jobs and influence have now warmed up to hosted-apps as a way to quickly meet business unit needs without adding significant costs to their own organization. For many developers, selling a hosted software solution is now an easier and faster process than selling installable code.
On the strength of these developments, 2005 may very well turn out to be the year that software as a service goes from being an alternative means of delivering software to being the preferred means.”
Read more in Burnham’s Beat post.