Jason Maynard, an analyst with Credit Suisse has a must read paper on the broad benefits that SaaS delivers:

Regardless of what specific application you might be evaluating, you stand to benefit from SaaS in five major ways. When you subscribe to a software service instead of purchasing a software license, you:

Save money.

Save time.

Focus your technology budgets on competitive advantage rather than infrastructure.

Gain immediate access to the latest innovations.

Join a community of interest.

The analysis relies on sources that are about 6 months out of date but the general points are current. The last point about communities is very important. The best way to encourage a software developer to give you what you want is through communities. In the past, these have been ‘behind the firewall/paywall’ forums. Today, developers need to be transparent in order to earn and retain trust. That in my opinion, is where the real innovations behind the service element start.

The report is detailed but should take no more than 20 minutes of your time.

Colleagues Phil Wainewright and Zoli Erdos are mentioned as is Mike McDerment, CEO of Freshbooks to whom I tip my hat.