Software as a Service (SaaS) presents a classic “disruptive innovation.” Of course, in 2010 that’s not new news.

What is remarkable is how closely the SaaS market’s evolution matches the definition of a disruptive technology that was described by Harvard Business School professor Clayton Christensen in The Innovator’s Dilemma (he later replaced the term with “disruptive innovation” in his subsequent book, The Innovator’s Solution). In fact, the SaaS dilemma that incumbent software vendors currently face is playing out almost page-for-page from Christensen’s books. As a result, we can use the disruptive innovation framework to gain insight into what’s to come in enterprise software.