Presentation given to a CIO group at Babson College November 21, 2008, examining the rapid growth of the SaaS market and the IT/business implications of the on-demand services market.

1. Tracking the Growth of Software-as-a-Service Presented by, Jeff Kaplan Managing Director THINKstrategies [email_address] 781-431-2690

2. The Evolution of Man

4. Today’s Perfect Storm The Economy Enabling Technologies Shifting Customer Attitudes

6. The Nicholas Carr Affect "...Imagine what future generations will see when they look back at the current time...won't the way corporate computing is practiced today appear fundamentally illogical -- and inherently doomed?” “ The End of Corporate Computing” Nicholas Carr, The MIT Sloan Management Review, Spring 2005.

9. On-Demand Has Become Mainstream

10. Enabling Technologies Broadband networks Grid computing Blade technology Virtualization Web services & SOA Service provisioning Performance management

13. Interest in SaaS Growing Source: THINKstrategies/Cutter Consortium % of Respondents Using SaaS 2007 32% 2008 62%

14. Welcome to Gartner’s ‘Slope of Enlightenment’ Gartner’s Hype Cycle You are here.

15. On-Demand Market Adoption Forecast Market Penetration 2010 2008 2006 2004 Innovators Early Adopters Mainstream Buyers Laggards

16. SaaS Expands from Front- to Back- to Inter-Office Apps BUSINESS APPLICATIONS CRM SFA … Collaboration SCM … ERP Finance … Front Office Inter Office Back Office SaaS Market ‘Gold Rush’

17. Top Ten Showplace Application Categories Source: SaaS Showplace 44 Messaging 46 eCommerce 47 Human Resource Management (HRM) 49 Marketing 55 Enterprise Resource Planning (ERP) 62 Project Management 67 Document Management 78 Accounting/Financial 80 Collaboration 103 Customer Relationship Management

18. Top Ten Showplace Industry Categories Source: SaaS Showplace 42 Software 43 Telecommunications/xSPs 55 Professional Services 63 Government 69 Retail 72 Healthcare 80 Technology 91 Manufacturing 102 Banking/Financial Services 110 SMBs

19. SaaS Expands from Business Apps to IT Management BUSINESS APPLICATIONS CRM SFA … Collaboration SCM … ERP Finance … Front Office Inter Office Back Office Security Systems Mgmt … Network Mgmt Remote Access … Data Protection Storage … IT Management

22. Managed Services/SaaS Convergence Managed Services SaaS

24. The Convergence of Managed Services & SaaS

28. Shifting Adoption Patterns Unilateral End-User, SBU Adoption of SaaS Solutions Enterprise-Wide Acceptance and Adoption of SaaS

30. Size of SaaS Deployments Growing

32. Moving from SaaS Apps to Cloud Computing Cloud Computing Services SaaS Apps

34. Cloud Computing: Today’s New Enablers

35. New Challenge: Cloud Computing Outages “ Amazon S3 Outage Rains On Cloud-computing Parade” “ Outages Force Cloud Computing Users To Rethink Tactics”

37. On-Demand Services & The IT Industry Inversion Services Technologies Past Future The IT Industry Inversion

43. SaaS Ecosystems – The New Channel Jamcracker

44. Changing Competitive Landscape & & & AimNet Solutions ever dream

45. A Future View Software Services Business Services Information Services Market Evolution