The current controversy that considers SaaS as mutually exclusive with On Premise is, in my view, more related to the current state of technology, than to business or functional issues.
Clearly, if On Demand applications have to be developed and deployed on entirely different platforms and technologies (RIA and multi-tenant) than On Premise applications (Windows and JEE or .NET), then it is difficult, cumbersome and costly to support both.
The topic is not a theoretical issue – I consider it the critical enabler for the growth of SaaS. The majority of ISVs are facing a tough challenge when it comes to offering SaaS as they and their customers are looking to cut costs, yet to offer a SaaS portfolio an ISV is faced with a potentially large upfront investment needed to offer a SaaS version of their products. I will expand on the ISV challenge in a separate post.
That is not a pipe dream – the first application platforms that supported this proposition (Magic Software’s uniPaaS) hit the market almost a year ago, and just recently PaaS provider Longjump announced an On-premise version of their PaaS. There’s even persistent speculation that Force.com would follow suite.Clearly, on-demand business requires a different business approach than on-premise – but I view it rather as a super-set than a mutually exclusive path. And as we see in the SaaS integration business, many vendors offer a SaaS pricing models to on-premise installs – and doing so for applications should not be much different (assuming customers provide a compliant infrastructure and operate it).
Now, consider the proposition in which the same application platform (and consequently application) supports various deployment modes (single and multi tenancy, Fat, Browser or RIA client). The Client appliance aspect becomes immaterial. A software vendor using such a platform can unify its development and support cycles and have a single cycle of updates and upgrades. The SaaS hosting center (and not necessarily only one) becomes yet another “on premise” customer, hopefully with many more users than a “regular” on premise customer. And customers have the power of choice and can evolve and migrate their software usage in accordance with the evolving business requirements.