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I’ve been suggesting for years that the IT system management (ITSM) market is ripe for a new generation of Software-as-a-Service (SaaS) solutions, and a widening array of emerging players are finally fulfilling my vision.

Up until recently, IT departments have been plagued by the same frustrations which permeated most large-scale enterprises contending with overly complex, cumbersome and costly business applications.

In the case of the business units, it was trying to implement and maintain enterprise applications, such as CRM or ERP, which drove them crazy and in the direction of SaaS alternatives from companies like (NYSE:CRM) and NetSuite (NYSE:N).

Now, IT organizations are starting to migrate away from the ITSM platforms offered by IBM, HP (NYSE:HPQ), BMC and CA in favor of SaaS-based alternatives from and others.

Why are IT departments moving in this direction? For the same reasons as their business unit counterparts,

  • Frustration with the costs and complexities of traditional, on-premise ITSM has reached a breaking point.
  • In today’s tough economic environment, IT departments have to do more with less and can’t afford the inefficiencies associated with legacy ITSM.
  • Traditional ITSM wasn’t designed with today’s highly dispersed workplaces, mobility and cloud computing resources in mind.
  • Technological advancements are making today’s SaaS-based ITSM solutions more viable alternatives to legacy systems.

So, just like in the broader business environment, there is a ‘perfect storm’ of economic, technological and attitudinal forces which are driving IT professionals to adopt various SaaS ITSM solutions.

My latest commentary in Ecommerce Times discusses these drivers further.

But, it is worth noting that between the time I submitted this column to the online publication and when it was posted, the following industry announcements and SaaS-based ITSM vendors crossed my radar,

  • CA announced its intention to acquire Nimsoft after previously announcing that it would acquire 3Tera.
  • Citrix (NASDAQ:CTXS) acquired Paglo to strengthen its SaaS-based GoToManage capabilities.
  • AccelOps is rolling out enhancements to its integrated datacenter monitoring and ITSM software.
  • ManageEngine continues to enhance its ITSM suite which sells for a fraction of the cost of legacy platforms.
  • France-based Staff&Line is opening offices in the U.S. to offer its ITSM, IT asset management, configuration management database (CMDB) and automatic inventory capabilities here.

These are just a handful of the numerous companies targeting this market. THINKstrategies has over 150 companies listed in the HelpDesk, IT and Application Management categories of its SaaS Showplace. And, this is probably only half of the total number of companies targeting the ITSM market!

Just like in the overall market, these SaaS ITSM vendors are successfully penetrating large-scale enterprises as well as small- and mid-size businesses (SMBs). We’ve recognized many of these players with our Best of SaaS Showplace (BoSS) Awards.

And, the ITSM legacy vendors — IBM, HP, BMC, CA and others — are desperately trying to respond to this significant challenge in the same way as their enterprise application counterparts — Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), SAP and others — have done - with a combination of acquisitions, alliances, internal development and external PR.

It is for all these reasons that I identified ITSM as one of the key battlefields for 2010.