Hosted software will play a major role in the future but not the dominant that some market watchers expected it could have.
The dose of realism about the prospects for SaaS has come from Gartner which has noted that the overwhelming majority of users are not opting to embrace pay-as-you-go billing models.
Another problem the analyst house has identified is the bad practices of the offline world are being replicated with companies paying for software they end up not using.
"In 2009, within enterprise applications, SaaS represented 3.4% of total enterprise spending, slightly up from 2008 at 2.8%," said David Cearley, vice president and fellow at Gartner.
Despite the prospect of true SaaS not reaching through to the mainstream in quite the way analysts and vendors might have expected the technology to it is having an impact on the software market.
"SaaS changes the role of IT from implementing its own operations to inspecting a vendor's operations," Cearley added.