Firstly they look at email and come to the conclusion that running an in-house email system is only cost effective if there is more than 15,000 users on the system. Google Apps is apparently two thirds cheaper per use at $8.47 in the report.

Also they look at Ray Wangs report that recommends software buyers to Shape Your Apps Strategy To Reflect New SaaS Licensing And Pricing Trends. 

They pull some highlights from this report, reproduced below:

• “Rich user experiences and intuitive Web 2.0 approaches reduce the overall cost of user training compared with fat-client user interfaces that reflect older user-experience practices.”
• “True multitenant SaaS users experience frequent upgrades with minimal downtime and minimal reduced testing resources — leaving business users time to get value from the software. “
• “Forrester’s Total Economic Impact (TEI) studies show that in most cases, SaaS delivers better TEI and lower cost.”
• “Constant innovation with quarterly and even monthly product updates deliver product road map predictability.”
   

This is worth looking at in conjunction with Jim Liddle’s recent article on the “Economy of Cloud” which looks at whether cloud is indeed cheaper and has some real pricing comparisons as well as the O’Reilly article on the “Economics of Cloud Computing”

The future may be Cloudy but that isn’t necessarily a bad thing.