SaaS vs In-House
There are merits of both SaaS and In-House, but some blatent things are obvious, but unaddressed:
1) Network connectivity. Sure, a SaaS datacenter has DS3, or OC12+ lines and the like, but what about YOUR business? Business-class cable modem? DSL perhaps? Splurge for a T1? This is what /most/ small-to-mid-sized businesses use (they're the most likely to use SaaS anyway, right?). Outages on these forms of connections happen more frequently than for SaaS datacenters. Have hosted email? Probably best. Hosted business-critical apps? Definately not. Imagine not being able to schedule or lookup appointments for the Mac Genius bar for even 2 hours. Imagine if your entire billing software is "in the cloud" and you lose your internet connection for half a business day?
2) Backups. I admit I haven't had the need to request a backup from a SaaS service, but I doubt they use CDP (continuous data protection [to steal a Symantec buzzword]). What if you needed to review files that were deleted over a month ago? Better yet, what about that file you typed up 3 days ago, lived for 6 hours, and was printed & deleted before end-of-day? Will they troll your (hopefully existant) backups and recover that singular document for you? My current in-house backup strategy can, and fairly easily too. Since *most* data recovery is needed within 24 hours, and all the rest but a few percent within 7 days, having a backup system you KNOW can fulfill your needs in that regard is crucial.
3) Privacy. Data breaches don't happen much, but Silverpop is a good example of why you may not want to just have your data out there. A small/mid biz is a lot harder to hack if no one knows your IP. (hosted websites are another good SaaS use, mostly)
4) SaaS is great if you don't have a knowledgable IT-staffer, which is the case of many small/mid biz (sadly), since it will provide a company with many assurances that you won't get by electing the one guy in the office that owns TWO computers as the tech go-to guy.
SaaS and the Cloud are great, but they're just buzzwords for client/server networking, just on the internet instead of the server closet.