The crux of the IDC study's finding was that smaller businesses are gravitating toward applications being offered "on demand" not such much because of the delivery method but because of the types of SaaS solutions being offered this way. And no other way.

In other words, small companies are opting for CRM in a SaaS format because they NEED these types of applications, it's the quickest way for them to get up and running, AND because they can pay for it in a way that's more palatable. (Gradually, not all at once.) By the way, CRM is the most-requested application among the IDC survey respondents. Midsize companies are more apt to move payroll and other applications related to human resources management online, IDC finds.

Overall, the IDC study shows 5.1 percent of small firms and 15.2 percent of midsize firms plan to adopt some kind of SaaS solution in the next 12 months. Of course, this doesn't track the level of investment they have already made. ... Separate data from Forrester Research figures that last year, about 12 percent of all CRM purchases were made under a SaaS contract. By 2011, it believes 25 percent of all business software will be delivered this way.

So, why does SaaS matter to me and you?

Well, frankly, because the channel programs in this area are nascent, to say the least.

NetSuite, for one, has come under fire for its fee structure and its emphasis on downplaying the need for local touch. In its defense, its long-term focus on vertical implementations is the right one, especially given the IDC findings. Here's a snippet of that aforementioned letter, which goes to the heart of the matter:

"Whoever said SaaS did not require knowing the client's business and providing on-site training and implementation? I think this is the fatal flaw with SaaS vendors that ignore the reasons to recruit and build a strong partner channel. The long-term strategy for SaaS must include local and vertical partners, but they need to be "real" partners working closely with the direct sales channel. This not only makes good business sense, but retention and renewals will be higher and more consistent."

Incidentally, our reader chose to withhold his name on this one....

Last summer, Microsoft CEO Steve Ballmer committed to building the right model for the SaaS channel and we hear that work is starting. What I want to know, is there anyone else out there that we should be watching? Who else is doing that? Let alone doing it right?

Indulge me by sending tips to hclancy@cmp.com.