Jacques Chester over at Club Troppo has a nice piece titled “Shared Hosting is Doomed.” One of the arguments he makes revolves around the idea that over time labor costs for technical administrators will rise substantially while the costs of hardware will continue to drop precipitously. I’m in complete agreement.
One of the big benefits I see for Software-as-a-Service (SaaS) is that the technical labor costs are spread over a large group of users in a very efficient manner. His argument, as it pertains to the low-end, shared web hosting environment is a positive for SaaS: increased technical labor costs will drive more companies to SaaS solutions.
SaaS is going to have a greater impact than most people realize. I’m looking forward to it.
David Cummings on Startups 