Yesterday, I moderated a panel titled “Going 100% SaaS” during the Office 2.0 Conference. There is a full video, so if you have 40 minutes to spare, you can see it all. It was also covered in Ben Kepes' blog. The panelists were 3 SaaS vendors (Dan Druker from Intacct, Rob Holl from Adaptive Planning, and Jeff Schultz from Bill.com), and one near 100% SaaS customer, Doug Harr from Ingres. Although we didn’t get to talk much about the future of SaaS, several interesting takeaways came out of the event:

• 100% SaaS is real — Companies like Ingres made strategic decisions to become 100% SaaS, and they move programmatically toward that. If it was not for Exchange and Office, Ingres would be 100% in the cloud.
• Going more SaaS has many cost advantages — First, it costs less than buying licenses. Doug compared his $140K/year investment in SFDC to $1.5M he spent on Siebel licenses only at his previous company. Second, it allows companies to flex costs based on the economic situation and to avoid shelfware.
• SMB and technology companies first — It sounds like the first to adopt SaaS are young companies, technology companies, and SMBs. There are many department-driven sales as well.
• The CIO needs to become a real business partner — both before the session and during the session we got to speak a lot about the changing role of the CIO. Now, when departments can make software decisions and the issues of deployment are removed, the CIO needs to become a business partner and help the business units to make product decisions and help integrate the relevant pieces to the overall business process. CIOs that will protect their turf and will try to control everything will find themselves out of the strategic decision loop.
• SaaS empowers SMBs — SaaS allows small and mid size businesses to benefit from features that were once used only by large enterprises. With little implementation and monthly per user price point, everyone can get the best e-signature solution, or start managing projects more effectively. TakeEchoSign for example, British Telecom (BT) is using exactly the same tool to get 1,000s of sales contract signed a day as a limo service provider renting 3-4 limos a day, and they both realized the same exact benefit: getting agreements signed in an hour instead of a week.
• Security — I was sure no one would ask the question, but it was asked… all vendors said that with SAS 70 and self-imposed standards, SaaS provides better security than a server you maintain in house. Intacct, for example, is hosted in an IBM data center guarded by armed guards and using retina scan for identification — very few customers will go that far to protect their data… Jeff mentioned that a security glitch for a normal company can be unpleasant, but for a SaaS company it can be a death sentence — something that motivates SaaS companies to be very carful.