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There is always a possibility for some large new vendor, that may decide to challenge existing EA vendors (Google?). But again huge switching cost will discourage large firms from embracing a new vendor unless the new application radically simplifies implementation and integration of EA software. Remember extremely draconian implementation and integration of Enterprise Application that causes firms to fear changing EA vendors. Hence Barriers to Entry to the new EA Vendor is high. So Scenario 2 is out.

We will continue to see rapid innovation. As mentioned in my blog 2008, Year for Mass Adoption for SaaS, this year might be the breakout year for SaaS – disruptive delivery model that will challenge traditional EA delivery model. In fact, it’s that Holy Grail that has the potential to simplify implementation and integration problems all firms face. Diminishing computing power, storage cost will continue to lower barriers for the competitors and we will continue to see new and disruptive applications. Better collaborative tools will lead to lean and agile Open Source Solution. All of this will continue to challenge Enterprise Application as we know it. I think, Scenario 3 is the only viable option.