With "recession" permeating the air, on demand services are looking even more attractive to CIOs and investors. Jeff Kaplan, managing director of THINKstrategies, wrote:
Escalating oil prices, the uncertain political landscape and faltering financial institutions beset with the aftereffects of the sub-prime lending debacle could mean a tough year for the economy. In this tenuous climate, consumer and executive confidence could decline, leading to an economic slowdown. As a result, many companies could hold back on their capital investments to mitigate their risks. The ability to adopt on-demand services on a pay-as-you-go basis will be a perfect sourcing strategy for businesses seeking greater cost-controls and flexibility.
Kaplan also points to other trends that will make 2008 a pivotal year for software-as-a-service, such as the growing adoption of managed services, utility computing and Wall Street buying into SAAS companies.