Moore's Law and SaaS companies

Since the invention of the integrated circuit in 1958, the number of transistors that can be placed inexpensively on an integrated circuit has increased exponentially, doubling approximately every two years. This trend was first observed by Intel co-founder Gordon E. Moore in a 1965 paper and has since been known as "Moore's Law" (see http://en.wikipedia.org/wiki/Moore's_law ). 

Comparing traditional software companies with the SaaS approach, it occurs to me that there may be instances where Moore's Law applies in terms of productivity. For example, how many developers are needed to deliver the same solutions? With the platforms available today like DotNet, DNN etc., I'm rapidly becoming convinced that half the developers can do the same job as installed software products. Because of the reduced number of versions that need to be supported, half the configuration management and support people are needed. Because SaaS applications are very amenable to online sales, half the salespeople are needed. You catch my drift? 

Now, let's take SaaS product development and look that in more detail. Does Moore's Law apply to the next SaaS product generation? I think it does, because the platforms available are providing more and more modules that can plug and play (like chip layout tools have). For example, who programs a payment system from scratch any more? Who designs GUIs without style sheets or equivalent? Why would anyone build their own data center when they can totally outsource that to credible and reliable hosting companies who have all the infrastructure to provide appropriate SLAs? The more the basic components of software products are modularized and made standard, the more rapidly new products can hit the market with fewer resources and costs. 

Of course, you have to have the right idea and feature set that meets the needs of your customers - and when you don't, react fast. Not in 6 months, but more like 6 days. Effective and rapid concept creation and fast reaction and change to meet customer demand become far more important in the development cycle, and if you look at most projects this is where most time is lost - so this is the area that can scupper my thesis. 

But assuming companies use rapid prototyping and the voice of the customer to launch a product on the market fast, it seems to me that Moore's Law can apply to SaaS product cycles. 

Rev your engines!