@rick names 3 dimensions by which customers think of SaaS, but to me they are necessary but far from sufficient. Others, like @netevidence and @burster touch on why the 3 alone are not sufficient, and I think the biggest reason is actually the business model and the go-to-market model. The latter G2M incorporating all the touchpoints including admin and support and innovations and advocacy. For vendors you have to be able to find enough customers at a low enough cost of acquisition and retain them as long as possible while driving all costs down and all complexity of interaction out. That's a heck of a lot more than hosting your battered out ERP system and calling it SaaS as you rightly point out.
@netevidence really makes those points, and that's little to do with deep technology e.g. how it is hosted, although overall it can only be achieved by a integrated range of technology e.g. web to forums to analytics to email systems etc.
SaaS has to deliver value day 1, on-premise delivered a promise on day 1 and then after the usual project disillusionment the team left and the customer had a whole lot of sunk cost. That relationship building to which @netvision referred isn't going to be in the DNA of the on--premise vendor for one simple fact - it is not the way their people are compensated.
I too get frustrated with the "host a product" and call it SaaS, although it's often hard to explain to people who don't know what they don't know. But hey! It's their money let them try and if they can pull it off good on them.
@llaratte great post, that's excellent.
Walter Adamson @g2m
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