SaaS Won't Kill On-Premise Software

Software as a service. Cloud services. If you believed the hype, you’d think all managed service providers (MSPs) need to completely shift their customers from on-premise solutions to online solutions. But many of the strongest SaaS proponents still launch on-premise solutions for MSPs. Why? Because 80 percent of the software market will involve on-premise IT for years to come.

Just yesterday, Zenith Infotech launched an on-premise business continuity appliance that stores 48 hours of backups at 15-minute intervals, 14 daily backups, 5 weekly backups and 30 day backups. The appliance arrives even as Zenith continues to evangelize its SAAZ managed services platform.

Similarly, Datacastle Corp. is pushing forward with a data protection strategy that features on-premise and SaaS solutions. (Stay tuned for more news within the next few weeks.)

And Fonality — which specializes in IP PBXes — has actually trademarked the term “Hybrid-Hosted” as a way to describe the company’s blend of on-premise and hosted services.

Simple Math

No doubt, SaaS and cloud services are fast-growth markets for MSPs and VARs. But the SaaS pond is far smaller than the on-premise ocean.

Consider this: SaaS represented only 6 percent of the overall software market in 2007, though SaaS will grow to represent about 18 percent of software sales by 2013, Gartner estimates.

So I ask you this: If SaaS does grow to command 20 percent of the software industry, can you really afford to ignore the other 80 percent of the software market?

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