In the highly-fragmented Web Content & Experience Management marketplace, cloud or SaaS vendors do have their niche. But that niche remains quite narrow.

There are clear advantages to the SaaS WCXM model: get rid of the extra IT support overhead and the burden of installation, maintenance, hardware support. In the same breath, SaaS WCXM vendors are failing to pervade the WCXM marketplace.

We’ve seen some M&A activity in this segment in the past year, but little meaningful product development.  For more details, consult our recently updated 2012 WCXM "Cross Check" marketplace analysis.

Now, if you're evaluating a cloud WCXM supplier (either SaaS, managed hosting, or true cloud), you might be thinking about things like data security risks. Security is important, but other requirements may emerge as equally salient. For example, your WCXM system will likely need to “talk” to other pieces of software in your enterprise ecosystem. At least from our experience, as integration requirements get more sophisticated, SaaS vendors increasingly fall short, particularly when it comes to the layer of experience management functionality in addition to good ol’ web content management.

But I'm also curious about your experience. Have you been evaluating or experimenting with cloud-based deployments of on-premise WCXM solutions? Or worked with a true SaaS WCXM system? I’d love to hear about your victories and challenges.