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The Hybrid SaaS Model Gains More Ground: CDC Moves toward The Future with A New Acquisition

Not long ago, CDC Software announced plans to acquire on-demand companies in order to create one SaaS software solutions provider to complement its on-premise products for various verticals. Last week, CDC announced they have signed a binding term sheet for the future acquisition of a SaaS provider for not-for-profit (NFP) organizations; the name of the company was not disclosed.

Given the rise of SaaS—a recent global study by Avanade consultancy shows that within 2009 alone, the number of companies using only on-premise solutions decreased from 61% to 41%—this is a smart move for CDC to offer customers multiple deployment options. It is even smarter to offer a combination, as the hybrid SaaS model is proliferating at light speed. CDC plans to take these SaaS and on-premise offerings worldwide, via 22 offices and 1200 resellers and partners. In terms of the NFP vertical solution, business should be good—market research shows there are 1.5 million registered NFPs in North America alone, and SaaS solutions are extremely cost-effective. The soon-to-be-acquired company is venture-capital financed, and provides solutions for ERP, CRM, financial management, e-commerce and others, in one platform.

This pending acquisition will also be fruitful for other CDC solutions: it will provide cross-selling opportunities for CDC MarketFirst and CDC Respond by expanding product functionality into marketing automation, lead management, and complaint and feedback management. Full procurement of the unnamed company is expected by the end of 2009.

Update 11/23: Read about how the SaaS hybrid model is even making headway in the eCommerce software market.