IT departments in large and medium corporations face extinction thanks to SaaS, IaaS and PaaS vendors.  But it’s got nothing to do with “on-premise versus the Cloud”.

Rather, IT’s role in managing business applications is ending.  Business users can do for themselves in minutes what used to require an IT programmer hours and days.

What’s radical about SaaS business applications like Salesforce.com is their configurability.  The fact that they run in another data center called “the Cloud” is less significant, imho.

Think about it.  Using a browser, business users with admin permissions can do lots of stuff to tailor how the SaaS application behaves:

• bulk import of data
• add new fields to the database
• create templates for workflows and business processes
• provision new users
• modify the role-based access model
• design dashboards
• …. and more

Contrast this to legacy on-premise applications like SAP.   Any change in application behavior required source code programming in “ABAP”.  Dozens of IT people would care and feed the beast, accumulating a long list of modification requests from the end-user community.  Upgrade cycles would require re-implementation of all of these changes against the new release.  Slow.  Expensive.  Brittle.

Thanks to the power of configuration, business department leaders are gradually and systematically dismantling on-premise ERP suites with a group of SaaS applications.  They are happy to be freed from the grip of a centralized IT organization.  And they’re voting with their feet (or, budgets) by consuming SaaS, IaaS and PaaS at an accelerating rate.

If IT organizations don’t re-invent themselves they’ll face extinction.  More in a future post on what re-invention might look like.