Software as a Service for the midmarket

Software as a Service (SaaS) is catching on in the midmarket. Get the answers to pressing questions about the technology with this IT Management Guide.

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Software as a Service (SaaS) is finding its way into the midmarket, due to its easy installation and low cost. But SaaS isn't without its issues -- how do short-staffed midmarket CIOs make the time to integrate SaaS technology with their current applications? Is it secure? Find the answers to these questions and more with this IT Management Guide.

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Table of contents

   Integration tricky with many SaaS apps
   SMBs sample SaaS via telecoms
   SMB SaaS sales robust; holdouts remain
   NetSuite IPO has SMBs optimistic
   More resources

  Integration tricky with many SaaS apps  Table of Contents

[Shamus McGillicuddy, News Writer]

As small and medium-sized businesses (SMBs) increase their use of Software as a Service (SaaS) technology, the need for integrating the technology with the rest of the businesses applications is becoming more critical. What they're finding, however, is that it's a job easier said than done.

According to research firm Saugatuck Technology Inc., as more companies use SaaS, the need to integrate those applications with the rest of a company's systems grows. In fact, 17% of SMBs are using more than one application delivered via SaaS, according to the Westport, Conn.-based firm's findings.

"In the early days of SaaS, a lot of applications were standalone and running in silos," said Liz Herbert, a senior analyst at Cambridge, Mass.-based Forrester Research Inc. "People just weren't focused on the challenge of integration. They were focused on customization. Now we're seeing SaaS used more broadly."

As a result, SMBs are grappling with how to integrate their applications without making a risky investment in time and cash.

   Learn more in "Integration tricky for SMBs using multiple SaaS apps." Also:

  • Offline SaaS applications on the rise (SearchSMB.com)
    As more companies rely on a mobile workforce, SaaS vendor apps are heeding the call. A growing number are offering offline clients that can synchronize with online SaaS applications, allowing your workers to work anywhere, anytime.
  • Is data integration the Achilles heel of Software as a Service? (SearchDataManagement.com)
    Software as a Service applications can create serious enterprise data integration challenges. Expert Rick Sherman discusses the problem and potential solutions.

  SMBs sample SaaS via telecoms  Table of Contents

[Shamus McGillicuddy, News Writer]

Telecom providers are looking beyond traditional voice and data offerings and tapping into the growing (and lucrative) Software as a Service (SaaS) market. The shift in strategy is a good one, analysts say. Small to medium-sized businesses (SMBs) that have been hesitant to adopt the Web-based software delivery model may be more likely to embrace it if offered by their current telecom provider.

XO Communications, a Reston, Va.-based telecom, recently announced a new partnership with Jamcracker Inc., a Santa Clara, Calif.-based company that offers a unique delivery platform for third-party SaaS providers. Via Jamcracker's platform, XO will offer a suite of SaaS business applications to SMBs in the 75 metropolitan areas it services.

Erin TenWolde, a senior analyst at Framingham, Mass.-based IDC, said many SMBs prefer to work with trusted advisors when making technology decisions. The SaaS market is flooded with young companies unfamiliar to SMBs, but those SMBs have long-established relationships with their telecom providers.

"I do think when it comes to technology adoption, those companies will go towards trusted advisors and established relationships to help navigate those purchases," TenWolde said. "I think a lot of the telecom companies are maybe looking at SaaS and SaaS-related opportunities."

   Find out more in "SMBs sample SaaS via telecoms." Also:

  • SaaS CRM software takes vertical approach (SearchCRM.com)
    RightNow and Salesforce.com have both released vertical versions of CRM recently. On-demand is catching up with on-premise, but both have a long way to go.
  • EMC targets SMBs, delays Software as a Service plans (SearchStorageChannel.com)
    EMC is developing Software as a Service products but won't roll them out to partners until 2008; instead it will build its SMB market share with new storage products and support.

  SMB SaaS sales robust; holdouts remain  Table of Contents

[Shamus McGillicuddy, News Writer]

A new report out earlier this month finds that SMBs are diving deep into the Software as a Service (SaaS) market. But on its heels is a report from another major research firm suggesting that SMBs may be kicking the tires, but they're not buying.

So which is it? Boom or bust? It really depends on which side of the fence you're standing, said experts. It's a delivery model that has everything to lure SMBs -- easy installation, low cost. But some SMBs say they still have issues with security and flexibility.

According to Saugatuck Technology Inc., a Westport, Conn.-based research firm, the percentage of businesses with one or more SaaS applications in place increased from 11% in 2006 to 26% in 2007. Growth among SMBs, defined as businesses with less than $1 billion in revenue, was even more dramatic: SMB adoption rose from 9% in 2006 to 21% in 2007.

William McNee, founder and CEO of Saugatuck, said SaaS, a subscription-based, online software delivery model, is moving beyond adoption by line-of-business managers as IT organizations start investing in SaaS products with higher levels of customization, collaboration and personalized workflow.

   Learn more in "SMB SaaS sales robust, but holdouts remain." Also:

  NetSuite IPO has SMBs optimistic  Table of Contents

[Linda Tucci, Senior News Writer, and Shamus McGillicuddy, News Writer]

Gerry Morton, CEO of EnergyFirst, a Manhattan Beach, Calif.-based maker of protein shakes, has been using NetSuite Inc. products to run his 10-employee business for three-and-a-half years. The way he sees it, NetSuite's attempt to raise $75 million through an initial public offering (IPO) could be a good thing for customers.

"They'll have more money to invest in making the software better," Morton theorized. "I understand there is going to be a lot of cost and overhead associated with it and the company could potentially get defocused, which is not good. But I hope that is offset by the [money] they'll have to throw at improving their technology."

Founded in 1998 by Oracle Corp. CEO Larry Ellison and Evan M. Goldberg, NetSuite's chairman and chief technology officer since 2003, NetSuite offers Web-based accounting and other business software to SMBs like EnergyFirst. In recent years, NetSuite has been gaining ground with companies that could not afford and did not warrant the kind of customized, enterprise-level business software offered by companies like Oracle.

   Learn more about the IPO in "NetSuite IPO has SMBs optimistic." Also:

  More resources  Table of Contents

This was first published in July 2007

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