What's the most exciting development in marketing software these days? Hands down, it is the continued growth of software as a service (SaaS) as a viable alternative to traditional in-house systems. As the number of conventional competitors continues to diminish through industry consolidation, the survivors are concentrating on expanding the breadth of their offerings. This means any significant innovation must come from outside the ranks of the established vendors. The most likely candidates are the SaaS vendors, who have less to lose and are freer to concentrate on specific functions rather than trying to be all things to all people.

The biggest challenge facing SaaS vendors happens to be the conventional vendors' primary line of defense. The issue is integration across company systems: SaaS vendors must find ways to allow such integration, while conventional vendors rely on integration difficulty as a reason for clients to buy components within their integrated suites. The fact that the suites have often been cobbled together through acquisitions and are not well integrated internally is a topic many would rather not discuss - although, to be fair, having prebuilt connectors and a single vendor responsible for making them work helps quite a bit. One weakness in the conventional vendors' strategy is that changes which facilitate integration of their acquired products, such as rebuilding their systems on J2EE or .NET platforms, often make it easier to interact with external products as well.

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