How hot is Software as a Service? Well, a big crowd packs LTW event.

DURHAM, N.C. – How hot is software as a service? Hot as the recent heat wave.

Just ask the nearly 200 people who turned out Tuesday for WRAL Local Tech Wire’s “SaaS Road Show” at the American Tobacco complex in the Bull City.

“I had no idea this many people in the Triangle were interested in SaaS,” said one of the venture capitalists in the audience.

In a panel discussion led by former WebEx president Gary Griffiths, three leaders in the Triangle’s emerging SaaS industry and one big user of SaaS services, attendees heard about the latest offerings, trends, opportunities and concerns. Globally, SaaS (which used to be known as application service providers among other things) enables companies to contract out for applications and services so they can concentrate on core competencies.

“SaaS today is being driven by real business requirements,” said Griffiths. From e-mail marketing, such as provided by Durham-based iContact, to human resources, including Raleigh-based Peopleclick, to health records management by Raleigh-based MediClick, more firms are contracting out for crucial services than ever before. Why else would Cisco pay more than $3 billion for WebEx so the networking giant can help deliver applications over the Web?

LTW partnered with the Carolina SaaS Users Group to put on the event as part of its Executive’s Edge series. The program continues today with another panel discussion in Charlotte.

iContact Chief Executive Officer Ryan Allis, MediClick Vice President for Development and Operations Tony Verdone and Dave Anderson, co-founder and chief architect at Peeopleclick, explained various offerings.

As a user, Don Sturdivant, chief technology officer at Square 1 Bank, spelled out why his firm utilizes several SaaS services. For example, Sturdivant sand contracting out services such as e-mail and spam filtering enables his firm to offer “7 by 24 human intervention that I otherwise couldn’t staff and afford.”

However, Sturdivant also warned the crowd that SaaS isn’t easy. “One key question is how do I assemble what I need from the various providers,” he explained.

Griffiths picked up on that concern, noting that companies have to assemble their own “mashups” of applications in order to integrate SaaS services with their enterprise networks.

Anderson, meanwhile, said companies must get over their concerns about trust in letting outside vendors manage sensitive data and applications.

“Is your application part of your secret sauce? If so, then you may need to host and build it yourself,” he said. “If not, it makes total sense to go get what you need as a service.”

Of course, he noted, the biggest question remains: “Is there a suitable application out there?”

There must be. A lot of companies want SaaS, especially in tougher economic times.