Even though many software vendors are now venturing into the Saas market, one market still remains difficult for Saas vendors to penetrate with a marked degree of success and that market is the US federal agency business.
Saas translates to Software as a service which is believed to bring more cost savings to end users (as opposed to buying software outright.) The main reason barring US federal agencies from patronizing the Saas business model is the usual government concern about threats to security and privacy. The current mindset in the government bureaucracy and absence of pertinent data standards also hinders adoption of Saas by the US government.
It might be said that Saas software vendors may need to have courage to tap into the US federal government agency market, and that courage should be matched by the courage of the US federal procurement officer who will stake his or her reputation on the Saas solution he or she gets for the federal agency. In government, failure is never an option and can lead to the procurement officer losing his or her job.
Another reason Saas gov solutions may be hard to sell to US federal government is that usually Saas is a pay-as-you-go system. US government agencies have to be able to predict expenses because that is how government agencies function.
Still, if Saas developers can manage to address all these concerns and give appropriate solutions, then Saas may be a viable solution for the US government as it faces attrition and smaller budgets.