The economy downturn doesn't mean that companies will refrain from buying IT products and services. After all, IT is a critical supporting process for each and every organization. However, economy woes will change ? potentially forever ? how companies spend money on IT.

Whether the SaaS model allows organizations to reduce IT costs in the long term remains an open question. I personally doubt it. On the other hand, SaaS offers a number of obvious benefits in the short term. I already mentioned SaaS strengths and weaknesses in another post. Some strengths matter most in times of crisis:

• SaaS renders costs predictable, which is particularly valuable when future is uncertain.
• SaaS delays cash outflows by effectively spreading up-front capital investments over a period of time.
• SaaS moves IT complexity out of the way and considerably reduces IT risks (while security still remains an issue).
• SaaS is scalable, allowing adjusting capacity according to actual demand.

Jeff Kaplan's Think IT services blog has a good post showing further evidence about the crisis strengthening SaaS demand. Joshua Greenbaum also discusses on ZDNet why pure SaaS might not be sustainable but hybrid SaaS will tame customer fears. Moreover, two years ago Gartner already highlighted SaaS disruptive potential.