Further justification for the on-demand model: get bug fixes faster. If anybody tells you software doesn’t break – they’re lying. Software is fallible. Sometimes the best QA misses the most tiny error that only one person in a billion will ever come across. But with SaaS it gets fixed fast, and it gets fixed for every customer simultaneously.
From the post:
Of course, conventional on-premises software vendors already realize that this is an advantage and are straining to rearchitect their legacy code along service-oriented lines. These projects, variously named Fusion, NetWeaver, Nexus and Dynamics are due to bear fruit sometime between 2007 and 2012, if anyone can be bothered to wait that long.