The Economist writes:

SaaS is fast becoming sophisticated and flexible enough to meet the needs of large companies, says Sheryl Kingstone of the Yankee Group, a consultancy, but for the next five to ten years we will continue to have a mixture. In a survey, she found that 81% of respondents leaned towards a hybrid model, combining traditional software with SaaS. Microsoft, Oracle and SAP are all belatedly moving into SaaS, but they understandably prefer to characterise it as a new model that will exist alongside the traditional way of doing things, and will appeal to some, but not all, customers.

So it is too soon to write the obituary for traditional software, even if its eclipse by SaaS seems to be only a matter of time. The SaaS market is growing by about 50% a year, compared with single-digit growth for traditional software, notes Mr Maynard. It doesn’t mean the big guys are going to die overnight, he says, but this is where the market is heading.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.