Future of SaaS

Recently I replied to a question on LinkedIn on SaaS impact on Software Industry, in particular to the people developing software. Below are my thoughts:

SaaS is a rapidly growing space, with lots of interest from the enterprise. There are good case studies to indicate that it will reduce TCO both in the short and the long run. However, it is yet to prove itself as a viable substitute for critical business application running today's Fortune companies.

Do you think Banks are going to trust any third-party vendor to store critical financial transactions, who [Saas] by the way, can potentially host their competitor's information as well? I think besides "Confidentiality", "Availability" is the other question that SaaS vendors need to address. Recently Amazon's web services were plagued by multiple outages leaving many customers in lurch.

SaaS seems to be the next exotic thing on horizon for SW industry, albeit I think companies will continue to develop and use traditional software unless SaaS proves itself as a viable "bread-winning" avenue for software developers and ISVs.