What does SaaS Really bring to market?

To understand what role SaaS will really play in the Web2.0 generation I decided to try and deconstruct exactly what it brings to customers.

So zooming back in time a little bit I would say that the emergence of SaaS was closely tied to the failure of on premise (desktop, 3-tier, client server) software to control the cost of ownership. Now in some ways SaaS is a redux of the mainframe - green screen model. But we all agree that the current version of SaaS has much more to offer than that.

According to me the two main things that SaaS offers to its customers is agility and abstraction.

Now both of these perceived benefits that SaaS brings have boundaries and many customers have discovered that they are kind of brick walls at times as well.

Imagine if you were an army of one and wanted to address a business issue by deploying an application. SaaS provides the agility to do that. In the on premise world the work on this kind of an initiative would have been significant and to a large extent the same whether it was an army of one or a legion of consultants. But then again, I would like to reemphasize the boundaries. As many SaaS initiatives have discovered once you take SaaS deployments to a large scale you start hitting some of the same real world problems on premise products have hit in the past where the products are too generic and requirements too varied, so it leads down the road of custom solutions and all the TCO related items that ride a custom solution.

However its the second value that is of greater interest to me. "Abstraction", software vendors have grappled with this issue for a while now and miraculously SaaS seems to provide a solution for this to a great extent. Now I say "seems to" because folks can argue against it and in reality even the SaaS vendors are not there yet. But to me the ability for a SaaS initiative to abstract or layer the "data" from the "application metadata" from the "business logic" from the "UI" is sort of the leading edge. A number of vendors have claimed this and tried delivering S/W based on these designs but you just have to go through an exercise of upgrading that software to its next version or build complex business requirements into it to realize how intertwined things can get. This leads to management issues and application of more resources which ultimately leads to huge costs and the thread goes on.
To customers SaaS seems to offer that promise that they wouldn't have to worry about these inner wiring's so to speak and just deal with their business application from an application perspective. So if the SaaS vendors pushes out a new release or updates a particular component or feature the customer is insulated (or to a large extent they are).

So then to me the question would be why stop at that. Why not have the cake and eat it too. Would it be whacky to think of a SaaS evolutionary stage where the service delivers the software artifacts from the cloud but the data, business logic and all other components remain local. Now I can already hear the SaaS purists crying foul. But to me coming from the enterprise S/W world like most of the large customers and sitting in front of this paradigm change its a valid thought.

What if my data, application metadata, business logic and UI were abstracted completely from each other such that it wouldnt matter to me if the vendor used a SaaS service behind the scenes to manage, modify or replace it. Maybe that's nirvana, maybe its a bunch of BS.

However it already sowed the seed for my next post. How does SOA play into all this is it the super glue or modelling clay that holds this together.