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At SaaScon 2007 in Santa Clara, California, last week, there was much buzz about the future of the industry with regard to open source software. One particular speakers panel session was entitled “Tapping into Open Source for SaaS” and sought to examine “how open source software and Software as a Service models are rapidly converging to create the business model of the future.”

It’s a good time to be in the open source SaaS biz, then, as panelists SugarCRM chairman/CEO/founder John Roberts, president/CEO William A. Soward of Adaptive Planning, and SpikeSource’s Joaquin Ruiz would surely agree.

And recent figures would bear out this confidence in the market, for it appears that while SaaS is growing steadily particularly among SMBs, open source programs are winning over customers in heretofore uncovered areas.

A study recently released by IDC, The Adoption of Software as a Service in Small and Medium-Sized Businesses: Perception Versus Reality, analysed results from the company’s 2007 survey of 614 small- and 418 medium-sized businesses in the United States.

Most pointedly, the study showed Software as a Service’s strong growth potential, with 5.1 percent of PC-owning small firms and 15.2 percent of PC-owning medium-sized firms planning to move forward with a SaaS solution within the next twelve months.

Survey authors caution, however, that specific solutions will be driving this growth, as few firms show attraction to SaaS in general. This is where open source programming can fill SMB needs and make a little money in the process.

Interestingly enough, open source SaaS is already making serious headway in Europe and the wedding of the two is on honeymoon in Asia (more on this momentarily), but interest in the United States lags.

In Europe, folks figure this has mostly to do with Oracle/Siebel’s dominance in the American CRM software market. With firms like SAP and Salesforce.com chipping away at that lead, however, US business are certain to come around soon enough.

Inspiration to make the challenging switch to open source software may have been provided earlier this month by Lumen. While smaller companies such as Iona Technologies and Aras have switched to an open source business model, Lumen’s size should cause more of a ripple effect toward the software biz.

Lumen hosts a SaaS platform currently used by over 200 commercial customers with 150,000 users and is reportedly the first PHP platform to focus on SaaS developers. Lumen explicitly markets its product as making possible as an alternative to proprietary SaaS development platforms such as AppSpace and Microsoft’s OfficeLive.

Lumen is targeting its platform at PHP developers (reportedly a gang of some five million-plus) wishing to provide SaaS to end-users, but want to develop with open source standard tools running on a Linux Apache/PostgreSQL/PHP server stack. The Lumenation SaaS application server and software development kit is free, and creators of web-based desktop applications are encouraged to download pre-developed application frameworks for SMB, enterprise and educational end-users to the site.

What does this mean? It means that Lumen may have officially, um, consummated the “marriage” between open source and SaaS for American audiences. It also indicates that the chief stumbling block for open source hawkers, that simply of innovation, may have been overcome despite the lack of success by ActiveGrid’s attempt to become a mainstream-level PHP application server.

The Lumen plan may well be the end result of the evolution of commercial open source software that began with Red Hat and MySQL and continued through SugarCRM to hint at becoming what more than one outlet has called “a disruptive force.”

Indeed in the Asian business world, open source, SaaS and the interplay between the two have moved beyond “disruptive force” status and into the mainstream. IDC Asia-Pacific has released numbers showing that some 83 percent of the Eastern market has exposure to open source software. SaaS penetration has seeped into approximately one-quarter of the Asia-Pacific software industry and this number is growing steadily.

Meanwhile, in Europe, proprietary software daily comes closer to a dodo’s fate, with open source blowing the traditional stuff out of the water. It seems ever more clear, though, that open source SaaS can’t fail to make headway in the United States; the only question is how quickly the inevitable may happen.

Here, that big problem of innovation comes up again but in a different sphere. Could it simply be a question of marketing? One observer remarks that perhaps open source companies should simply cease calling themselves “software companies” in order to more effectively impart the mentality of a new technological paradigm in the ‘States.

The “Software as a Service Perceptions Survey” undertaken by managed web hosting provider Rackspace shows that the Great Unknown lies between open source SaaS adoption and the SMBs who could be using the stuff. Among the revealing statistics were figures that showed that nearly 36 percent of responding SaaS customers were unaware of uptime guarantees provided in the SaaS vendor Service Level Agreement and 49 percent of enterprise Software as a Service customers do not know where the infrastructure behind their SaaS application lies.

Just as importantly, though, survey respondents showed high enthusiasm: 51 percent of respondents currently employed at least one SaaS application and 72 percent of those users were considering additional SaaS applications. And 69 percent of respondents believe SaaS is the preferred software delivery method of the future.

Without further education on such systems, the adoption of open-source technology will be stalled. But not for long: Wide-ranging adoption of open source SaaS can’t be too far ahead; its time is clearly coming and coming quickly.

Vienna, Austria-headquartered CRM solutions provider Update Software AG has taken over 100 percent of German CRM specialist Orgaplan Software GmbH. The purchase price in the amount of €5.8 million will be paid on basis of a two-year earn-out model.

With approximately 200 customers, Orgaplan Software GmbH is said to be the leading provider of CRM solutions in the German banking and savings bank sector. The company’s customers include more than half of the savings banks and public-sector credit institutions in Germany and one-third of its large commercial and agricultural credit cooperatives. Orgaplan operates a branch in Hanover and employs about sixty.

Founded in 1988, Update software AG (lays claim to status as Europe’s leading provider of premium CRM solutions, with over 200 employees and revenue of €23.4 million in 2006. Among Update users are 3M, American Express Bank und Finanzmanagement, the Advertisements Department of the BILD newspaper group, AstraZeneca, BAWAG P.S.K., Canon, DuPont, ESTAG, Hassia Gruppe, HVB, Landesbank Rheinland-Pfalz International S.A., LBS Nord, LBS Ost, MagnaSteyr, Pernod Ricard, Sony Deutschland, Sparkasse Bremen and ratiopharm.

SiriusDecisions (Whoa, great name. A solid 9.7 out of 10 on the Astronomy/Science-Fiction Geeks Appreciation Scale) released some details on the upcoming Sirius Decisions Summit 2007.

Execs from Autodesk, Dow Jones, EMC, Edelman, and SalesForce.com will be speaking at the show themed "Return on Integration." The shindig will be held May 16-18 at the Loews Lake Las Vegas Resort in Henderson, Nevada. (Don’t worry; it’s right outside of Las Vega$.)

Findings from SiriusDecisions’ research on best practices in demand creation, marketing ROI and sales and marketing productivity will be released. Summit keynoters will include: Ken Bado, SVP, Worldwide Sales & Services, Autodesk; Clare Hart, EVP, Dow Jones and president, Enterprise Media Group; Brian Fitzgerald, senior director, integrated marketing, EMC; and Rene Bonvanie, EVP, Salesforce.com.

The conference also will feature a presentation on building corporate reputation, entitled "The Trust Barometer" to be delivered by A&R Edelman president Bob Angus and StrategyOne president Laurence Evans. Sponsors for the show include Brainshark, Eloqua, Dow Jones, Pragmatech, Alinean, Aprimo, Avitage, Genius, Harte-Hanks, Hoovers, iCentera, KnowledgeStorm, Manticore, OneSource, Rainmaker, Sant, SAVO, TrueAdvantage, WebReply and Winn.

Show organizers expect to draw more than 250 sales and marketing executives. The conference is open to the public.

SugarCRM Inc., provider of commercial open source customer relationship management, today announced plans to expand support for customers of the Oracle Unbreakable Linux Support Program across all SugarCRM solutions.

Based on the growing community and customer demand, SugarCRM and Oracle can now provide customers with a single fully supported solution. It’s a big move by firms who’ve been tight for a while: SugarCRM has been a member of the Oracle open source partnership for the last two years.

SugarCRM Inc., provider of commercial open source customer relationship management, today announced plans to expand support for customers of the Oracle Unbreakable Linux Support Program across all SugarCRM solutions.

Based on the growing community and customer demand, SugarCRM and Oracle can now provide customers with a single fully supported solution. It’s a big move by firms who’ve been tight for a while: SugarCRM has been a member of the Oracle open source partnership for the last two years.

SugarCRM Inc., provider of commercial open source customer relationship management, today announced plans to expand support for customers of the Oracle Unbreakable Linux Support Program across all SugarCRM solutions.

Based on the growing community and customer demand, SugarCRM and Oracle can now provide customers with a single fully supported solution. It’s a big move by firms who’ve been tight for a while: SugarCRM has been a member of the Oracle open source partnership for the last two years.

SugarCRM Inc., provider of commercial open source customer relationship management, today announced plans to expand support for customers of the Oracle Unbreakable Linux Support Program across all SugarCRM solutions.

Based on the growing community and customer demand, SugarCRM and Oracle can now provide customers with a single fully supported solution. It’s a big move by firms who’ve been tight for a while: SugarCRM has been a member of the Oracle open source partnership for the last two years.

Speech-recognition software Nuance Communications, Inc. has unveiled version 9 of its Nuance Recognizer (What else would they call it, really?), a speech recognition engine for speech-based customer care and voice search solutions. The development project is code-named Quantum and reportedly is the result of over 400 person-years of research and development.

"Nuance Recognizer signals a new era of performance for speech solutions," said Nuance speech division president Steve Chambers, throwing that gauntlet like it’s never been thrown before.

Nuance is claiming an average error reduction of 27 percent error reduction rate over previous versions. Company PR states that “Nuance Recognizer is designed to understand what users mean, not just what they say. … For example, if a caller states, ‘I’m moving to Atlanta and need a new number for my cell phone,’ the system can decipher several pieces of information from the caller’s single statement … Since up to 20 percent of retries and confirmations are from callers providing too much information at once, these advanced natural language capabilities deliver significant performance improvements…”

Eloqua Corporation, a supplier of automated demand generation applications “and expertise” to business-to-business marketers, has announced that risk management firm Aon Corporation selected Eloqua Enterprise to improve its sales department. Aon is rolling out the solution globally to all its marketing branches in North America and Europe.

Eloqua’s on-demand suite, composed of products Spartanly entitled Enterprise, Team and Express is employed by Aon. An on-demand solution, Eloqua automates and integrates the sales and marketing functions in email, direct mail, website analytics, campaign analytics, and sales force automation.

Aon is also using Eloqua Enterprise to run integrated global campaigns utilizing tradeshows, newsletters and hypersites. Now, “hypersite” isn’t defined by Merriam-Webster or even Wikipedia, but Eloqua is kind enough to tell us that this term refers to “a personal website automatically adapting your marketing message based on company, industry, job title, geography or anything you already know.”

Eloqua Corporation provides integrated demand-generation applications for B2B marketing programs. Among Eloqua clientele are Sybase, Seagate, Nokia, MySQL, Administaff, and Nuance. Eloqua Corporation is headquartered in Toronto, Ontario. Aon Corporation is a provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. Aon employs 43,000 in 500 offices in over 120 countries.

Infusion Software, a provider of on-demand CRM and marketing automation software for small businesses, today announced an upgrade to its flagship Infusion CRM. Infusion CRM Version 5.0 promises a seamless upgrade for all Infusion SaaS users.

Touted in 5.0 are advanced capabilities in each of its CRM modules: Marketing Management, Usability, Affiliate Module, Order Management and Sales Force. To wit, such goodies as conversion tracking, which allows user to insert a pay-per-click conversion code on e-commerce shopping carts; something the Infusiastic call “round robin sales team assignment logic”; and an expiring credit-card trigger, which pretty much speaks for itself; an A/R aging summary report function; “double opt-in enhancements”; revenue forecast report enhancements; and invoicing enhancements.

"The performance enhancements in Version 5.0 are immediately apparent," said Marc Chesley, VP of Technology and Development, Infusion Software. Well, all right then.