SaaScon didn't appear to be Setting the Agenda for an Industry in Transition, as it promised.  Attendance was poor (about 250 of an expected 600), key panelists canceled at the last minute, and there seemed to be more vendors and sponsors than enterprise customers.  The conference hit kind of a middle-ground between providing excitement and education: a bit bit of each; not much ofeither. None of the speakers really set a buzz in the audience, and data-driven observations were a rarity. With a few exceptions, guidance wasn't detailed or prescriptive, but based on anecdote or aspiration.

The speakers were generally good, but some notable SaaS companies --Amazon, Salesforce.com, NetSuite for example -- were absent from panels and keynotes. Then a few key panelists no-showed, including some you'd expect to offer some real insights:

• Bob Reid of Oracle, who runs Siebel On-Demand and was formerly CEO of Upshot
• Patrick Grady, Chairman and CEO of Rearden Commerce.
• Bob Stutz, SVP CRM Products and Strategy at SAP.

Despite my carping I did enjoy it.  One reason was that Microsoft's Emerging Business Team was a Platinum sponsor, and we had three great partners (Adesso Systems, LoyaltyLab and ExactTarget) there. It was quite useful to hear the varied perspectives on SaaS -- not so much because it was news but because the variation and nuance.

And ... if I seem critical, here's a very positive set of posts on the conference from Eric Norlin.

For me the sessions highlighted some of the factors that will continue to fuel SaaS growth, and some of the concerns and limitations that will continue to hold it back. I felt that most of the speakers and panelists fell into two types: evangelists who saw nothing but growth for SaaS itself, and visionaries who saw SaaS driving (maybe requiring) even more important change in the industry. The evangelists saw SaaS as unstoppable for the initiated and similarly unachievable for existing software giants (read Microsoft and, especially, SAP) slowed by their cumbersome licensing and huge revenues. The visionaries also viewed SaaS positively, but observed that success would require (and drive) new architectures and market infrastructures to reach its potential. A group of sceptics who made up a customer panel on Day Two were a tiny minority.

Here's a quick overview of the sessions I attended on day one (Monday), along with some of the key points, from my p.o.v. I've also tagged the speakers and panelists according to my arbitrary and indefensible type system :-)

Opening Keynote: The end of Software. The speaker was Tim Chou, author (and visionary). He's been telling the same story -- and it does have some good points -- for a while so for this audience it was a bit like re-reading Gone with the Wind. Tim's a good speaker, though, and didn't use slides -- another point in his favor.

Tim made three points:

SaaS offers economic advantages: customers have lower administration and deployment;  and ISVs (and hosters) become more efficient through specialization and standardization. One example Tim used: "imagine the cost and time spent trying to introduce the Buy Now feature if eBay's software had to be installed each user's desktop."

The future of SaaS will be increased specialization, in two ways. The first is the often-stated Long Tail Effect of SaaS -- a straightforward observation that software that doesn't have to be deployed can reach smaller and more remote segments. [A lot of people mangle this, by claiming that lower SaaS costs for ISVs enables reach to more narrow segments. It doesn't]. Tim also observed that SaaS-enabled specialization and reach would allow industries to re-shape themselves along their areas of special competence. Tim's example was SABRE -- the airline reservation system -- and he suggested that FedEx, for example, might conceivably become a logistics service. This is what John Hagel concluded in Out of the Box, so it's well-trodden ground with plenty of examples: eBay as an auction house and bazaar; Google in search and ad placement; Progressive in Insurance, .... 

Tim then predicted a SaaS-fueled future where individuals with complementary skills form ad hoc teams to solve problems, much as they do in World of Warcraft. Tim cited recent test by the magazine Nature (proving Wikepedia is as accurate and complete as the Encyclopedia Britannica) as a working example. It seems to me that Tim reached a little here. While I am not doubting the Wisdom of Crowds point he made, it's not obvious to me how that will power a software service for a business problem like, say, Supply Chain Management.

So, nothing new, but Tim's examples and anecdotes brought some new color to the topic. In hindsight, I can't help but think how much better it would have been if we'd had a thought-leading keynote like the one Jeff Bezos gave yesterday at the MIT Emerging Technologies Center.

For another perspective on Tim's keynote here's Dan Ciruli's post --  (Dan's at Digipede).

Keynote: Emerging Trend Panel. Moderator: Jeff Kaplan (MD of ThinkStrategies). Panelists: Anne Winblad (Partner, Hummer Winblad, VCs); Tod Loufborrow (President and CEO, Authoria). All Evangelists.

I have a jaundiced view of panels. The panelists rarely get enough time to make cogent points of view (so they tend instead to promote their products or make arguments out of anecdotes), the moderators don't sufficiently challenge the panelists, and the questions from the floor are seldom answered clearly.

This panel certainly did not exceed my already-low expectations. A few observations I felt worth writing down:

• Robert: Customers hold SaaS companies to a higher SLA than they can deliver themselves
• Anne: By virtue of specialization, SaaS companies can become more expert at BI than their individual customers.
• Robert (in answer to the question "how do you handle the desire of customers to have "one throat to choke" in a multi-vendor SaaS world?") said "the old guard won't get you there." I'm not sure that's the question he was asked.

Keynote: The Next Evolution of Software. Buell Duncan,GM, ISV Developer Relations, IBM. Evangelist

Buell was a good speaker, with a common-sense point of view about SaaS, but his speech didn't provide any news. I got the impression he'd picked up a standard deck on his way out of the office. Buell's conclusion was:

IBM's view is that the next evolution of business is complementing SaaS solutions with labor services and and domain expertise.

Presumably that means IBM Global Services. Buell's speech was short, which was appropriate.

Keynote: SaaS 2.0: Transforming Enterprise Applications. Bill McNee, Saugatuck Technology. Visionary

Bill gave the best keynote of the day in that it was based on market research. Bill had plenty of opinions, but at least he had a basis for them. Some key points:

SaaS, while and important  disruptive technology and delivery model, will grow to represent no more than 10-15% of the enterprise software market by 20010.

Architecture evolution (SOA) is required to drive SaaS in the enterprise, in two ways:

• to integrate a choice of SaaS vendors, and share data with and between them
• to orchestrate business processes. In this area, Bill projected  the emergence of an eXtended Enterprise Service Bus (XESB).

My only real objection to Bill's perspective is that that his XESB is a cross-enterprise evolution of the elusive enterprise service bus (read: even more elusive). Bill also suggested that only a small number of vendors could deliver it, and two are Microsoft and IBM. 

Technical Track: Understanding the SaaS architecture. Gianpaolo Carraro and Fred Chong (both from Microsoft). Visionaries

GP and Fred are well-known and well-respected in the technical community. They don't promote Microsoft products when they talk about architecture, and that reflects well on them and Microsoft. Their session was one of the few with real advice that could be followed. There's a preview of the session here.

I'm a colleague of both these guys, so my view is probably suspect. I'm not the only fan, though. They get a lot of kudos in the blogosphere:

From Dan Ciruli's (Digipede) blog:

GP and Fred Chong gave their typical, very informative session about SaaS Architecture this afternoon. My only complaint? Too short.

From Bill McNee's trip report (you'll need to subscribe):

In terms of other key highlights from the conference, I encourage readers to leverage the blogs of two well regarded Microsoft architects who spoke at the event, Gianpaolo Carraro and Fred Chong ... There is a wealth of unbiased and non-vendor specific information (kudos to Microsoft) that have been assembled and provided as it concerns a wide range of SaaS architectural issues -- including choices that established and emerging software vendors need to make when designing their multi-tenant models.

Technical Track: Customization and Integration: SaaS' Achilles Heel? Michael Hoskins (CEO Creative Software) a visionary; Jane Edwards a customer/user from Cryocath Technologies, Inc. Jane was super-practical, but she was also clearly an evangelist.

This two-person panel focused on the need for integration between the customer's data and the SaaS system, for initial data loading, and whenever additional data was accessed by the SaaS provider -- to improve BI, for example. As Pervasive was the integrator that Jane's company had used, the discussion was clearly based on that relationship and didn't discuss alternative integration approaches. Nevertheless, it did provide a kind of practical counterpoint to some of the less-grounded discussions.

Keynote Panel: Applying SaaS Principles to Meet Your IT Management Requirements. Moderator: Jeff Kaplan. Panelists: Ed Mueller, CMO, Everdream; Gary Griffiths, VP Products, Webex; Jay Gardner, VP and GM On Demand Business Unit, BMC; James Miaocco, CEO Klir Technologies. All Evangelists.

This panel repeated a theme of "SaaS vendors deliver better BI too." This seems to accrue from two factors (which rang true):

• Each customers analysis needs, even if modest, build up a big pool of BI expertise in the SaaS companies
• SaaS deployment are either from small teams or small companies (the average SalesForce.Com license is for 19 users, apparently), so getting any BI on their data is a luxury.

One audience member asked why SaaS didn't just fall to the massive data centers and deep pockets of giants like Microsoft and Google. The reply  was that companies like Microsoft (I don't think they mentioned Google): "...have too much legacy revenue and behavior at stake to change ..."

I don't remember who said that, but there were lots of sad nods from the panel. In my mind I saw mourners speaking in hushed tones: "It's a pity to see them go. I remember when they were young and strong. But heck, they must be in a lot of pain. Maybe it's time to let them go."

<I made minor edits to this post for grammar and readibility >