ReadWriteWeb

There is a strong feeling in the air that cloud-based enterprise apps are no longer the "challengers." The sheer breadth of activity surrounding last week's Dreamforce conference in San Francisco was a clear indicator that SaaS applications had evolved into complete ecosystems, with strong support from third-party developers and strong distribution from plentiful partners.

So the word "cloud" had better figure into any response to last week's juggernaut from Microsoft. With this morning's release of Microsoft Dynamics AX 2012, the company's long-standing enterprise resource planning suite, the company is rolling out a new set of Windows Azure-based services that are leveraged on top of local deployments. The newest of these services is a deployment assistance tool called RapidStart that gives new customers a wizard-like questionnaire system for configuring Dynamics AX.

Some traditional enterprise IT vendors are selling the line that SaaS is a passing phase, that it is "old wine in new bottles". They are telling their market that SaaS is really no different from the discredited Web 1.0 Application Service Provider (ASP) model or even that it is simply the ghost of the ancient mainframe Service Bureau come back to haunt us all. This post shows why their analysis is wrong. It also shows why some traditional enterprise IT vendors feel so threatened by SaaS and why the economic downturn just made this a major issue.