The term ‘software as a service’ (SaaS) is most commonly used to describe software that is delivered over the internet to the end user with no need for locally managed applications or servers. The business providing the service will either charge you an on going fee or may even use ads to pay for the service.

SaaS has been discussed for a number of years and during the dot com bubble many (including myself) thought that by 2009 most business software would be delivered in this way. ‘Utility computing’ was the next big thing and we’d all be paying our IT bills just like our electricity bills. The type of IT department that sprang up to support a complicated PC on every desk would be a thing of the past.

My excuse was the start up I was helping get off the ground was going to be part of the wave as it washed all the old thinking away. Sadly for me (at the time anyway) reality soon showed up as the dot com bubble burst and the world of IT mostly snapped back along the safe, conservative path it had previously been on.

What’s changed?

* Everyone is now talking about ‘the cloud’ – how internet-based computing will revolutionise everything sometime soon.
* Low cost reliable internet connections are available to most of the population (as long as you’re not out in the country at least).
* Internet programming languages have become much more sophisticated allowing highly interactive, secure and reliable applications.
* Business models for service providers have had a decade of refinement and now we are seeing some big brands involved (Google, Microsoft, Salesforce etc).
* Companies such as Google and Salesforce are creating internet-based systems to allow programmers to write applications that only run in ‘the cloud’.
* Most of the population is now used to the concept of accessing some sort of SaaS whether it be Twitter, Hotmail, Google Docs or even just sending an e-card.

So what next for SaaS?

For all these changes it feels to me a bit like 1999 all over again. ‘The cloud’ is everywhere and the only interesting things seem to be internet-based.

As yet we haven’t had to deal with a major outage, data loss or probably more likely, business failure for a large provider – it has happened for smaller ones but these haven’t generally made it into mainstream press. This year online bookmarking site, Ma.gnolia (that’s not a typo) suffered a database corruption that resulted in all data being lost forever.

This upset a lot of people affected but it probably didn’t cause businesses to fail. If the same happened to a company providing business-critical systems it could well lead to customers not being able to continue. Even if they were off-line for a prolonged period it could have a major impact.

The same can happen with internal systems, it’s true – anyone in IT will have heard of major data losses due to failing backups that nobody noticed. But should that happen across a number of businesses, it will surely be a major story and not just one for the IT press.

Assuming we continue to have reliable internet connectivity into the future, the model for SaaS is hard to argue with. However, I think we are still some way from it being the dominant model for IT delivery. There are large bumps to be gotten over and lessons to be learned which should form a natural part of the evolution.

Maybe in 2019 the only way to get your fundraising, membership or word processing system will be from ‘the cloud’ but certainly not in 2009 and probably not even in 2015.