SaaS and On-Premise Software - Two's a crowd

Google's presentation at the Enterprise 2.0 show in Boston pushed out more sound bites regarding cloud computing. They made the statement that innovation in enterprise applications during the next 10 years will happen on the Internet (in the cloud).  Certainly, company spokespeople like to put forth the vision at these conferences, but I doubt we will see the obsolescence of Microsoft, Oracle, SAP or other on-premise software during that same 10 year period. The capabilities of the cloud have from most analysts viewpoints, caught up with what you can do on the edge. The question is not about technology however, it's about who carries the asset on their books and how it is managed. There are many companies with rather significant investments in "legacy" systems. What may come to a surprise to this generation is much of that legacy business logic drives corporate differentiation and value creation. It can certainly be ported to new technologies (e.g., SOA hype), but why bother when most of these systems are already depreciated and continue to work? There are still those users who want to "see" the systems running on site, especially if they are communication systems or data centers. It's up to the business leaders to make the case for a change from the status quo. Lasting innovation is driven by market forces, not from the innovation itself.