For awhile, companies like Microsoft, Oracle and SAP as well as most EA practitioners would state that traditional applications like the ERPs of the past decade were just as easily deployed in a SaaS manner as they were installed within the sanctum of their customers’ data centers. A classic example was what IBM touted in early 2000s as their ‘on-demand eBusiness’ offering.
However, there are fundamental differences in running a true multi-tenant application versus virtualizing a large application and then running it in another disparate location.Though it can be a topic in its own, SaaS applications leverage the same code base across their customers (for the most part), allow for infrastructure resources to be *truly* shared across multiple customers and the licensing cost is defined of user attributes allowing for a variable cost structure.
Purebred SaaS vendors such as Salesforce.com have demonstrated how much easier it is to build a SaaS centric application from a clean slate, rather than try to retrofit an existing codebase to support a delivery model that it was not originally intended for.
Though this realization took awhile to sink in, it seems like the incumbents are rushing to fill in product portfolio gaps once the realization has struck home - that SaaS is here to stay and to re-engineer existing applications is either or both cost prohibitive and will be slow.
So Oracle bought RightNow and SAP has acquired SuccessFactors. Expect SAP to acquire more companies as it tries to catch up to the marketplace and Oracle.