Phil Waineright is doing a series on the trends he is expecting in the SAAS space in this year (2007), first two parts of the series are on reaching out to offline users & Composition instead of integration, the third post is titled "It's about services, doh!", I completly agree with Phil on this thought this is a trend that we are also seeing in the it services / BPO market , As highlighted in a post sometime back, most IT Services companies are bundling IT outsourcing along with BPO and providing END CUSTOMERS WITH BUSINESS SERVICES, this trend was highlighted in an white paper by TPI.

Phil further breaks this trend down in 5 parts / sections

1. More acquisitions of SaaS vendors by business service providers - The acquisition trend will accelerate in 2007 as business service providers recognize the potential of SaaS solutions to enhance and modernize their service offerings, extend their market reach and enrichen their profitability.
2. An expanding universe of partnerships between SaaS vendors and other online service providers - 'mashing up' of on-demand software and other virtual services will make the term SaaS increasingly redundant. Software in itself 'as a service' is not where we're headed. It's just services, with software as just one of several supporting enablers, and the Internet as another.
3. Convergence of Web 2.0 with SaaS and SOA - Whether they're internal services or external services, Web 2.0 mashups or enterprise 1.0 legacy applications, the overriding trend is that It's all about services.
4. Aggregation as the new competitive battleground - The ability to aggregate shared services is absolutely core to the on-demand model, and it was interesting that the ability to integrate different services.
5. Emergence of the on-demand business - Now possible to set up in business using on-demand services and Internet-based communications without having any of the bother of acquiring premises, staff, manufacturing plant or distribution facilities.

Source: 1

Prashanth Rai