Goldman Sachs is favoring the idea that SaaS companies may be responsible for hurting the profits of on-premise software vendors, says a new article in InternetNews.com. The first last week downgraded numerous software companies from "attractive" to "neutral" and reduced earnings-per-share estimates after research forecasted decreased IT spending.
One area apparently less at risk was SaaS, in part thanks to the ability to "quickly and easily turn on new applications with a significantly lower cost of ownership," wrote analysts. In a slower economy, price and TCO could certainly become more of a factor in decisions about new implementations.
Along that same train of thought, Mathew Schwartz of Bmighty.com also weighed in with an analysis on how SaaS may impact Microsoft Office. This has been an interesting trend. As more and more options pop up for SaaS-based alternatives to Microsoft Office, and Microsoft stubbornly refuses to explore the idea of a browser-based office suite, companies are starting to take notice of how using SaaS could reduce costs.
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