Software as a Service (SaaS) has been around before the Internet but the Internet has brought it to the forefront for many applications. The approach has significant advantages from minimal set up costs, easier maintenace for the service provider and global reach.
SaaS comes in many forms from browser-based solutions to thin client interfaces. Regardless of the interface, a number of issues arise including security, backup, accessibility and long term viability of the service provider.
The reason I bring up SaaS is that more software development tools are moving in that direction. Even the open source Eclipse project has a web-based tool call Orion that is going into beta (see Eclipse Foundation Launches Open Beta of OrionHub). I have also written about a number of platforms that are exclusively web-based including MoMinis' smartphone game design tool (see Smartphone Gaming Platform Includes Distribution), Tabula's ABAX FPGA design IDE (see Web-based Development Tools Target FPGA) and DebugLive's online debugger (see DebugLive Delivers Debugging Online).
Most of us use SaaS in one form or another. I use tools like GoogleDocs, Gmail and DropBox. Most of these are free and I would be annoyed but not put out if they went away. I also use alternatives to these because the service they provide is relatively generic.
I prefer combinations that provide me with more control like Pogoplug's hardware and service (see Nice NAS). The Pogoplug NAS box works locally even without the web service that essentially provides a gateway into the box. That is something I like.
The other development tools are a bit more problematic from my perspective. The MoMinis and Tabula tools are only available online as are the related services. In MonMinis' case, this includes a game distribution system. Without this, the games would be of little use so the tight link between application code and the service is reasonable.
In Tabula's case, they are the only supplier of the FPGA targeted by their tools. On the other hand, Tabula makes use of standard definition languages like VHDL so a design could be moved to another platform. The online tools are primarily to turn the high level design into definitions for the FPGA.
The primary consideration is often the same as any SaaS, Internet access. If this goes away it is time to stop working. Internet access is significantly more reliable than in the past and finding alternate routes is something any SaaS user should consider.
I already run into some of the issues a SaaS user will encounter because I lose Internet access at least a few times a year. This is often due to power loss, occasionally hardware failures but sometimes it is the ISP. Even our website is down at sometimes, usually for scheduled maintenance.
Embedded developers are used to tools that run on their own hardware. Eventually most development may move to hosted platforms. Tool designers will need to consider SaaS as an option and platforms like Orion will facilitate this approach. In the long run it is still user beware.