Integration is the key
I don't disagree with Jonathon very often but this is a case I side with Mott. SaaS API's are not the same thing as having the full code base to work with when trying to integrate with company wide systems. Does anyone even want to argue that point?
Narrow scope stuff like SalesForce, which is just a wimpy CRM system compared to something like an ERP system, is easy to provide API's for. It only does so much, where do you need to integrate it outside of the sales order processing? We looked at that once. It did so little I just wrote the parts our company needed and it didn't take very long.
But try using a collection of SaaS applications for Sales Order Processing, Trucking/Logistics, Lab testing for meeting product specifications and shop floor control for producing in a make-to-order environment and connecting all those by API so you can block inside sales from shipping orders which have not been lab approved. And if approved, automatically create and send all the shipping paperwork and product certification to the customer, along with whatever the trucker himself needs.
We can do that here because all the code belongs to us. We can do anything we decide we want to do. That will never be true in the Saas world. You will be able to do whatever the vendor thinks MOST of their customers might want to do. And of that subset, what will let them charge you the most in never ending rent.
Integration is the single biggest key to efficiency and quality for any company. SaaS and outsourcing rarely get you there.
I get sick of hearing about NetFlix. I mean, come on, they let you download a file from a catalog and collect your monthly subscription. That's the entire scope of their systems. How many developers couldn't create that? It's only the scale they operate at that is impressive and that's mostly a function of hardware. As a developer, I'd be bored out of my mind working there compared to the manufacturing environment I've always worked in.