Came across this piece via Sadagopan, here are some excerpts from the same,

With Siebel being purchased by Oracle, there is a huge vacuum in the CRM marketplace. In addition, on demand is allowing more organizations, especially in the middle market, to afford enterprise-class CRM functionality without the 6-figure cost. This is opening up even more opportunities.

2005 was a tremendous year for RightNow. We continued our unbroken string of 31 consecutive quarters of revenue growth, rolled out several significant new releases, and established ourselves as the most complete on demand CRM solutions provider for the middle market and Global 2000. It was a particularly important year for the on demand/Software as a Service (SaaS) market overall. Corporate buyers are embracing this model in order to accelerate time-to-benefit, minimize the technology ownership costs that have historically dragged down ROI, and bring accountability into their relationships with software vendors.

The CRM marketplace as a whole has a very poor track record of customer satisfaction. Oracle, Siebel and SAP ("old guard") have never been characterized as having very good satisfaction rates. The SaaS model has significantly increased customer satisfaction, and also brought back accountability.

Old Gaurd also have major inhibitors to truly embracing this model. First, they have to build for multi-tenancy (only Siebel on demand has done this). Secondly, they have to alienate their partner network that feeds on the complexity of their solutions. With SaaS, implementation is short and quick, and it removed complexity. Third, revenue recognition is mainly on a pay-as-you-go vs. all the money upfront. It will be hard to satisfy Wall Street in changing this model. Finally, as I mentioned above, none of the old guard have a culture of customer success. This will be the hardest one to change.

Source: 1Prashanth RaiTag(s):SaaS, Right+Now