I get many questions about the future of enterprise applications. Will ERPs swallow the best-of-breed software providers? How will new technology approaches, such as services oriented architecture (SOA) and Software as a Service (SaaS) disrupt traditional installed software models?

I have shared my thoughts on these subjects both in private and on Supply Excellence. However, since my transition to the software provider world, my recommendations are often taken with a grain of salt. That is why I base my posts and opinions on the real-world experiences of enterprises like you and the research and sage counsel of the leading industry analysts and luminaries.

In this spirit, a new post on the Software Critic from Erik Keller provides answers to the above questions on the future of enterprise software. (By way of background, Erik is a true veteran and visionary of the information technology (IT) industry, having held various senior and founding positions at well-known advisory and consulting firms, including Gartner and Saugatuck. Most folks in the IT sector know of Erik. And those that haven’t have probably made technology decisions based on his research. So, when Erik notices a trend, most tend to listen.)

In his post, Erik equates the dynamics facing enterprise software providers (and, by osmosis, software buyers) to those that have effected the music industry in recent years. Specifically, new, On Demand delivery and flexible pricing models initiated by Apple iTunes (and emulated by others) have shattered long-held foundations of music licensing and distribution. Few would contest the point that this iTunes-inspired model (”accessing and paying for only the music I want, when I want it”) is the future of the music industry.

Erik argues that the same dynamics are in place in the enterprise technology sector. He says demographics are putting old-school, ERP- and large-integration-project-loving CIOs out to pasture. And “a new generation of web-savvy downloading kids” will become the new CIOs, business managers, and buyers. “Are they going to be looking for traditional stuff or will they be looking for something online? I think you can see where I’m going with this.”

Erik goes on to warn software companies that failing to embrace these new disruptive technologies could relegate them to the fate of Tower Records, a nostalgic brand that failed to accept that the market wanted a new, more efficient model that better mapped to their needs.

Many would argue that this shift has already occurred in the IT world. The last decade has seen IT decisions shift away from the centralized IT command-and-control of the 1980s and 1990s to the business line executives — such as CPOs, VPs of supply chain and procurement — who are laser-focused on accessing technology that can drive data and process efficiency and effectivness required to meet their business goals.

Upshot: the days of investing in technology for technology sake are over. More often than not, today’s technology buyers are the business line executives. And they have a clear purpose in mind: rapid deployment, rapid adoption, and rapid results — with minimal costs and burdens. And, if possible, with minimal need to secure scarce IT resources.

New technology development and delivery models, especially SaaS, are delivering on these new-world preferences and needs. (Aberdeen Group’s On Demand Supply Management Benchmark Report does a solid job of quantifying SaaS benefits in these areas. You can access a copy here.)