I thought this article via SearchCIO-MidMarket was worth pointing out for a few reasons.  First, it continues to reinforce the buzz about using on-demand delivery for enterprise software. In this case the granddaddy of them all – Enterprise Resource Planning.  Second, it lays out a bit of skepticism both about the general rate of adoption as well as SAP’s bold forecast of 10k customers on their Business ByDesign offering by 2010. 

A recent SearchCIO-Midmarket.com survey found that although 22% of CIOs plan to purchase an ERP system this year, only 9% of those plan on a SaaS product and 15% plan on a hosted product. A full 52% plan to use a traditional on-premise product and the rest selected "I don’t know."

And third, lays out some of the obstacles to that adoption (via Ray Wang of Forrester Research) including integration.

"…the downright dismissal of SaaS as an ERP option is because of concerns over integration, security, cost, performance and lack of customization to a business’ needs."

On the integration front, recent landscape activity includes ERP newbie Workday (founded by Peoplesoft founder David Duffield) acquiring integration on-demand company Cape Clear.  While not a blockbuster acquistion by an industry giant, it does point to needing an answer to the integration question as an enterprise SaaS application company.