The recession is often a time when companies look at where they can pare costs especially when it comes to headcount but this recession and the ensuing upturn may have a different outcome one where companies delay or defer headcount additions for a significant period. According to Tony Crowhurst, FSN senior writer, this could drive expansion of the Saas (Software as a Service) market.
Why? Well, there are two key factors firstly, economic growth is still fragile and the greens shoots could easily become down trodden so it makes sense to remain lean until confidence returns. Secondly, the technology is so much better which means that leaving it to an outside vendor is less of a risk.
Companies also recognise that to survive they need to deliver exceptional customer service and to do that without additional staff means that the adoption of Software as a Service (SaaS) may finally become a mass market phenomena. Why manage multiple servers and applications when the bandwidth exists to leverage these services on a monthly basis with the added attraction that you can modify your user count to take into account changing times?
SaaS has been around for a while – Google’s mail applications and collaboration tools are ubiquitous amongst consumers and freelancers whilst other providers such as Salesforce.com (with close to 50,000 customers) and Zoho.com (over 1 million users) have seen significant growth in the business space. This is area that Google has not been able to “monetise” to the same extent that it has in the consumer space and the recent e-mail outages may not have helped Google’s cause. Providers that have a heritage in the business space have the ethos, sector knowledge and an existing customer base that puts them in a stronger position to tap the market potential.
Microsoft too has joined the fray with its version of SaaS (Microsoft terms it Software + Services) and they are delivered as part of Microsoft Online Services. Microsoft’s offering allows companies to make use of collaborative technologies and with the growth of remote/home working; the ability to work seamlessly together is a distinct advantage. From as little at £10 per user per month a company can deliver Mail, SharePoint collaboration, conferencing/meetings and online communication services to its employees. There is a light version so there is no software required on the PC which makes hybrid architecture a reality; i.e. the head office function can use on premise mail applications whilst remote employees are able to access the same information through technology delivered via a hosting provider.
Microsoft’s venture into this space is certainly going to grow...Microsoft’s Office applications have taken a battering of recent – the twin challenges of “my current version of Word is good enough” as well as the threat from free providers such as OpenOffice have meant that future versions of Microsoft Office will have online capabilities and it’s probable that Microsoft will look to Online Services to deliver a plethora of other applications thus shoring up revenue.
The question is where will organisations invest first?
There is no doubt that the initial growth will be in the email space and Microsoft is certainly not alone... Google, Yahoo (using its recent Zimbra acquisition) and Cisco (via a WebEx and PostPath e-mail system) have the potential to compete with Microsoft and IBM for corporate e-mail seats. This will then create a large base of associated personal and group productivity applications. The next area where growth will continue is in the sales and marketing sphere – CRM systems in particular will gain wider adoption as companies meet the competitive challenge with better market insight into their customer base. SaaS also allows smaller businesses to use technology that they would normally not be able to afford and there is no doubt that the innovative use of these technologies will be driven from the SME space. If you can (for instance) deploy zohocrm.com for free for three users you’d be silly not to give it a go. Likewise you can evaluate a number of offerings for 30 days and it’s worth availing yourself of that option.
Before you sign on the dotted line here are some of the questions you should ask of your prospective vendor. The list may seem onerous but remember your business relies on the decisions you make!
- The Provider: Who are they where are they based, how long have they been trading, how many customers they have and do they have any in your sector and region.
- Service Costs - You should only be invoiced for what you use. If your usage is seasonal then you should be able to increase/decrease the user count easily. You should not be charged for maintenance.
- Security - Security of your information should be your overriding concern. The questions that you need to ask include what security is in place, what level of encryption is used and how the data stored for different customers is managed and or if they have monitoring software that checks the system inside as well as outside of the firewall.
- Deployment – One of the key benefits of SaaS is that there is no client (PC) install so ensure that is the case – else it negates the advantage of SaaS. Likewise check for browser compatibility. In an ideal world applications should run on IE as well as Chrome and Safari and Firefox. If your corporate standard is IE make sure the SaaS vendor’s application runs seamlessly on IE.
- Heritage – Check whether the application you’re interested in has been designed to work in a SaaS environment – by that I mean – have they “bunged” a web front end onto a legacy application or has it been designed from the ground up as a SaaS application.
- Upgrades - One of the key advantages to using a SaaS solution is the advantage that you don’t need to worry about upgrades – this ensures that you are always on the latest version. These upgrades should be included in the user cost and need to be delivered unobtrusively. Check how often upgrades are performed and crucially at what time of the day or night – their local time may not be your local time.
- Interoperability – Does your stuff work with their stuff? If you’re deploying a CRM system make sure you can access your contacts database so that you don’t need to retype data.
- Backup and Restore – People automatically assume that data is backed up but you need to check that is the case – also see whether you are able to download all your data locally – just in case. Backing up is only one part – restoring data is another – check what processes are in place and whether a test restore has been done.
- Data Centre - Determine who is hosting the solution. Is it hosted by the vendor or with others (called either managed-serviced or co-location). Ideally the data centre should have gone through what is called in the industry an SAS 70 Type II audit.
- Scalability - Your SaaS vendor needs to prove that it can grow with your company. Ask the vendor about their largest customers as well as the smallest and what proportion they make up of the customer base. What are their growth plans and where do they see the business developing.
