SaaS Goes Mainstream - Via Cramer, No Less!

Oct. 8.08 | About: Salesforce.com, Inc. (CRM)

I've been saying for months that the Software-as-a-Service (SaaS) movement will gain momentum as the threat of a recession intensifies.

Now that the prospect of a recession has turned into a full-fledged financial crisis and escalating fuel costs are fanning the flames further, the economic justification for adopting SaaS has become even clearer to a broader cross-section of business decision-makers.

The latest reinforcement of this point came yesterday from one of the most visible personalities in the business press today -- Jim Cramer, the host of CNBC's "Mad Money".

Love him or hate him, Cramer has become one of the most influential stock market commentators in the U.S., if not worldwide. And while many can criticize his ability to pick stocks or ridicule his crazy antics, Cramer does deserve credit for helping to educate people on Main Street about the nuances of Wall Street. And in the process, he has also made his viewers aware of many of the fundamental principles of business, as well as the critical success factors for market winners.

Therefore, I was pleasantly surprised to stumble across a segment of Cramer's show last night -- between the various post-mortems regarding the latest presidential debate -- that included an interview with Salesforce.com's (NYSE:CRM) CEO Marc Benioff and a strong endorsement of the SaaS model by Cramer, albeit while still cautioning his viewers to hold back on buying Salesforce.com shares because of its current valuation.

Despite Cramer's hesitancy to recommend Salesforce.com's stock, he strongly endorses the SaaS and cloud computing business models which he describes as not only recession-proof, but perfectly suited for today's turbulent economic environment. (It is always nice to have a popular figure like Cramer echo the mantra I've been preaching for the past year.)

Cynics might discount the significance of Cramer's endorsement, but I believe it is an important milestone in the evolution of the SaaS and broader cloud computing markets.