Had a beef with pure-play software-as-a-service (SaaS) vendors, the ones that have basically taken an existing on-premise function, such as CRM, and flipped it into an on-demand model? The problem with this model is that, once the novelty wears off, these SaaS offerings become more and more commodity-like, and their chief differentiation boils down to price.
This has made the early SaaS business a little boring for anyone looking to deploy something truly innovative at a functional level. SaaS 1.0 was about innovating at the purchasing, deployment, and maintenance level--as in monthly per user fees, no internal IT resources needed--but it had nothing to do with delivering new business services and functionality above and beyond what was already being done on-premise.
So it's good to report that SaaS has started to get exciting again, thanks largely to innovations I call SaaS 2.0 The basic premise is this: By accumulating users, customers, business processes, and industry knowledge in a single place--the proverbial computing cloud--SaaS 2.0 providers can start to offer services and functionality that could never be delivered on-premise for love or money.
Source: Managing Automation