In an article recently posted on ebizQ, Xactly Corporation founder Christopher Cabrera writes on how SaaS could herald a new era of a more customer-centric software industry. Customers who have purchased on-premise software have made a much greater commitment to a specific vendor and can be left at the mercy of that vendor's customer service support lines when problems arise.
But with on-demand software, the customers have much more ability to make changes if the vendor is less than responsive -- meaning that vendors who don't treat their customers right risk losing a lot of business. Cabrera's article details how SaaS moves the customer higher in the pecking order.
He also raises an interesting point about "hosted on-demand" software that is merely the on-premise software in a hosted environment with large upfront implementation costs, calling the tactic a wolf in sheep's clothing, and he suggests a checklist for how to evaluate potential SaaS solutions.
True On-demand (or Software-As-A-Service) is also enabling the adoption of Web 2.0 technologies. Mashups, social networking and user-contributed content are changing the way companies do business.
In Cabrera's and my world, it's called Sales 2.0 (http://www.sales20conf.com/), and it's clearly the future of sales and marketing.