That said, my post was not meant to be a hit job on the SaaS marketplace. This was intended to highlight the need to be honest about what the -customer- requires to be successful, going forward. The SaaS market place and cloud based offerings are early in their life cycle and I'm a huge fan.

I had some excellent conversations with some v smart folks at companies such as CubeTree and SocialCast, amongst others. If I'm right about the market need for deep integration and physical resources to really ensure success, I'm sure these providers will find ways to alter their models to respond to market realities. As long as they have the clarity to look at it objectively.

CIOs will continue to get more and more comfortable with opening up their firewalls to hybrid SaaS and on premise solutions, when it makes business sense.

But as soon as you cross to widespread use in larger enterprises, the need for effective integration (interoperability) with LDAP / AD directories and NTLM for Microsoft shops is a practical necessity. Nobody in their right mind would consider parallel creating and maintaining parallel authentication servers, account names, passwords, email etc – assuming that you want to be able to rely on authenticated access and identity.

The next step up the ladder is when customers need to deal with tens, hundreds – or thousands – of permissioned spaces and thousands – or hundred of thousands – of authenticated participants including external customers, suppliers, clients, resellers etc. See http://bit.ly/V7ge.

Now you need to a way to express access in terms of roles defined by LDAP or AD properties or queries – and do it efficiently while taking into account group and member changes etc.

Google just started to offer external synchronization with internal LDAP services using technology from its Postini purchase. But most corporate CIO's would consider this a pretty daring (i.e. risky) approach if the same service can be delivered on premise economically with subscription pricing and “Maytag repairman” level IT support requirements.

Effective authentication and permission-based loose coupling of social software and incumbent applications (effectively single sign-on for links following and permission aware enterprise search) is tough on premises and an enormous challenge if the social software component lives outside the firewall. “Requires behind-the-scenes voodoo” is a good description.

Needless to say I see this as a big advantage for best of breed vendors who offer on premise and hosted/SAS options along with exceptional consulting, services and support. Consulting, services and support delivered using their own software presumably – but it's always prudent to check!