ERP and this SaaS thing

Everyday day the "noise" around Software as a Service (SaaS) seems to ring in my ears.  The pundits just cannot stop talking about it, and there is certainly no shortage of companies out there with vested interests touting the great benefits of SaaS on their Blogs and Twitter accounts.  My opinion on the matter is that SaaS is a fine business model, one of many that works for some companies, in some situations.  It is not everything, it is not the absolute future.  There will be some software companies that leverage the SaaS model successfully, there will be others that will not.  According to one survey, it is VERY low on many CIO's priority lists for 2009.  That doesn't sound like any kind of revolution to me.
 
Away from the punditry and blogosphere, in the wild, we hear many different opinions from the customers and prospects we speak to on this topic.  One common theme we hear from controller/CFO types is the concern for immediate access to THEIR data.  Irrespective of the policy of the SaaS provider, many a controller takes comfort in knowing  their company's financial data is sitting on a server in their building, that they can go an touch (today called "on premises").  They want to know exactly where their data is, and that they or some one working for them, can get them their data whenever they want it.
 
This proximity concern is exactly why we see SaaS, or Cloud Computing, as a local partner opportunity.  The CFO may have a hard time with his/her data being across the country or across the globe, but they seem to be more able to get comfortable with their data residing on their local partner's server.  This is often referred to as Managed Services, where a local solution provide will host a customers, email, website, and in some cases their Accounting/ERP.  This resonates with a large number of prospects we speak to that have some level in interest in off loading some of their own hosting requirements.  We have a number of partners making a nice business with these kinds of services.
 
Like all hyper fads we have in technology, I expect the shine to wear off of SaaS sometime in the not too distant future.  I am not sure I can totally concur with Harry Debes of Lawson Software who predicts a SaaS collapse in two years, but I have always admired Harry's earnestness.  This Cloud will pass, and SaaS will be an alternative for the forseeable furture.  It just most certainly will not be the only alternative.