Software as a Service

Speaking of services, the software as a service (SaaS) market continues to grow. SaaS has slowly been expanding beyond the mid-market, and since it dovetails well with other trends like virtualization and utility computing, 2008 could be a breakout year.

The big success story in the SaaS world is Salesforce.com, which has created an entire ecosystem of related third-party applications. In fact, the company has started to refer to its offering as a PaaS (platform as a service). For the enterprise, this delivers the promise of one-stop shopping for related applications and better data sharing among applications.

Another important SaaS happening this past year was Google’s acquisition of Postini. Google continues to make inroads into what were previously desktop applications, and service-based offerings are leading the charge.