The rise of software as a service (SaaS) companies, such as Salesforce.com, RightNow, NetSuite and SugarCRM has been much hyped over the past two years, and has led people to believe that SaaS is merely a low-cost, fashionable extension of CRM. Of little interest to the outsourcing market, you might think.

Much of the hype comes from such people as Salesforce.com CEO Marc Benioff, whose annual 'Dreamforce' conference in San Francisco attracts thousands of delegates with an almost rock-concert-like buzz.

Indeed, speakers at last month's event included Neil Young, with evening entertainment provided by the Foo Fighters – a surreal moment, considering the highlight of most UK jamborees might be an Abba tribute act.

Other speakers have included such 'outliers' and original thinkers as Malcolm Gladwell, Google.org's Larry Brilliant, Peter Gabriel, and, last year, a confused-sounding George Lucas. The Force was not quite with him, as I recall.

(Lucas's educational foundation Edutopia uses Salesforce technology, and I did put up my hand to ask him if he considered calling it 'Wookiepedia'. Mercifully, the mic was not handed out at that session.)

All this might persuade the naysayers that SaaS is another big tail wagging a small dog: lots of overvalued, overhyped companies promising to change the world on the back of an over-inflated stock price and the last dregs of the 60s dream. After all, we've been there before: the IT industry had its own localised recession as a result.

But you can tell a lot about the viability of a market by the enemies it makes, and the friends who set up shop in the exhibition hall. At present, those enemies include SAP and Oracle – Larry Ellison is an investor in both NetSuite and Salesforce.com, but anecdotally is “terrified” of the latter. (Unlikely, I think, but an amusing prospect.)

Friends of SaaS include IBM, Accenture and Capgemini, on the one hand, and Facebook and Google on the other: these companies are not even opposite sides of the same coin; they're not even in the same pocket.

But why even mention Facebook and what does this have to do with outsourcing?

Well, the mistake many people make is in assuming that Facebook and its ilk are just amusing ways for employees to waste your money sharing their hangovers with the world.

All social networking sites are now powerful computing platforms that millions of people choose to use, and which thousands of developers write applications for. They are intuitive and easy, and companies such as Salesforce.com and NetSuite want to be 'the Facebook for business'.

Ridiculous? Not at all: Facebook has partnered with Benioff's company, with the intention of using both platforms to deploy business applications.

This century, IT has become integrated into our lives to a degree that seemed impossible even a decade ago. That means there is a groundswell of opinion against any technology that is heavy-handed, expensive, corporate, difficult to use, and which you have to rebuild the enterprise around – or write consultancy cheques to understand.

The eminence grise (or rather, blanc) behind all this is, of course, Google: that once-innocuous white page that many of us called home, and which now hides a vast network of applications and services.

IBM, Accenture and Capgemini now have SaaS practices, presumably with the intention of building lucrative consultancy services around baffling wealthy executives. Even the receptionist understands 'Facebook for business', but CEOs will reach for their chequebooks to have 'cloud computing' explained to them by a man in a big blue suit. At least, that's the theory.

The fact is that SaaS is a threat to traditional outsourcing, particularly in such mainstream BPO areas such as HR. Ridiculous? No: the fastest growing software company in the world is HR SaaS provider SuccessFactors, and it is built on the promise of disintermediating your business.

The proof of all this is found in a recent announcement by that über old-school enterprise provider SAP. About a year ago SAP accidentally validated the SaaS market by announcing it was entering it. Last week the company effectively announced that it couldn't afford to play in the market because the margins were too slim.

Exactly; but others certainly can, and that is why you should watch your backs.