This represents a clear change from a few years ago when software services were still considered oddities, reserved for something special, or to address a market that it was hard to sell traditional, packaged software to.
In the meantime, several things occurred:
(1) We became much more familiar and comfortable with using the ubiquitous web.
(2) We got a lot smarter about how to write software that exploited the Internet (rather than merely trying to repurpose software written for traditional implementation onto the Internet). This blog has addressed this issue many times, so we'll just mention two items in passing -- writing software that permits the user to be their own system administrator and writing software that permits multi-tenancy (many users to share a single server in a secure fashion).
(3) We discovered that customers were willing to make a different set of trade-offs in purchasing software:
-- Lower prices could justify less customization
-- Instant (or nearly instant) implementation and immediate usability could justify less control
-- Being able to outsource non-critical applications could free up scarce IT resources for higher priority projects
(4) The idea of where an office is or who's on a team changed radically. Today, offices can be anywhere, from the brick-and-mortar offices of the past to cars, hotel rooms, and desks at home. Teams are not just fellow employees, but may also include contractors, suppliers, and customers. In both cases, providing them with common on-line workspaces and access to applications and data is much easier in the flexible, dynamic world of a Software Service than in the behind-the-firewall world of IT, with its necessarily tighter security rules and project lag cycles.