SaaS != Hosted (Or at least it shouldn't have to!)

These days when people hear Software-as-a-Service (SaaS), they almost always interpret that to mean "hosted" or "in the cloud." That's perfectly understandable considering that many of the market leaders in SaaS also happen to be hosted offerings (Salesforce.com comes to mind!).

However, there's nothing necessary about delivering software in a hosted model in order to support SaaS or subscription-based pricing. After all, why does it matter where the software is installed -- in my data center, in a hosted data center, some of each -- when it comes to how or when I pay for it?

Dynamic and forward-thinking companies are getting this, and looks like we're about to start seeing more software that is available on-premise and/or in hybrid models -- in addition to "pure" hosted software -- in a SaaS/subscription/pay-as-you-go model. This helps businesses control their capital expenses, flex their usage and consumption of software both up and down, and get started on initiatives faster.

Software companies who recognize these benefits to their customers and embrace non-hosted subscription-based pricing models for their own offerings are teed up for growth as more and more of the market looks for ways to control costs and increase agility.