Oldie but Goodie – SaaS article from edition one of SMB PC magazine

Hey gang – did you know that I publish a bi-monthly magazine and maintain a sister site at smbpcmagazine.wordpress.com where you can get the latest!

Here is a Software as a Services (SaaS) article from the first issue that is outstanding!

enjoy the read…harrybbbb

Harry Brelsford

CEO at SMB Nation www.smbnation.com

Microsoft Small Business Specialist (SBSC) and MBA and other fun stuff!

PS – we are holding a major rager launch event at SMB NAtion 2008 in early october in sEattle! Celebrate the release of SBS 2008 and EBS 2008….

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Software-as-a-Service: Friend or Foe?

 

Software as a Service (SaaS) – I am sure you have heard about it by now, the emerging technology trend touted as one of the most compelling business innovations in decades. SaaS is a model of software delivery where maintenance, daily technical operations and support are provided by the software company. In recent Small Business Specialist Hands-On-Labs throughout the US, attendees went through a miniature version of the SWOT (Strengths, Weaknesses, Opportunities and Threats) exercise as part of the Small Business Specialist exam preparation. Many insightful, interesting and funny viewpoints would come up for discussion in each SWOT area, and for kicks, I would throw in SaaS under the threats column if nobody brought it up on their own. “SaaS?” attendees would say, “That will never make it in the SMB.”

 

Well, don’t forget about Ray Ozzie, the CTO with the SaaS vision. That is the same guy that created the Simple Sharing Extensions (SSE) for RSS, making the code available for free under the Creative Commons License. (Yes, Open Source from Microsoft!) Ozzie has set out to find the right balance between web-based services and client-based applications. Here is an excerpt of Ozzie’s “The Internet Services Disruption” memo dated October 2005, addressing opportunities. It reads:     

 

SEAMLESS PRODUCTIVITY – Enabling you to create, find and organize documents and data among all the desktops, devices, servers and services to which you have access, and with all the others with whom you need to work, through “shared space” products that are internet service-based, enterprise server-based and directly peer-to-peer.  Working within and across homes, small businesses, virtual workgroups and enterprises.

 

And voila, now meet Microsoft Office Live (http://officelive.microsoft.com/default.aspx). As of the writing of this article, Office Live is still in beta, existing in three versions: Microsoft Office Live Basics, Microsoft Office Live Collaboration and Microsoft Office Live Essentials. Getting confused yet? Microsoft Office Live Basics, for example allows a small business owner to create a website, get five e-mail accounts and register a domain name – all at no charge. Stepping it up a notch with Microsoft Office Live Collaboration (starting at $29.95/month), which includes all the features of Office Basics, it also has a slew of  online programs to manage customers, employees and projects, as well as online workspace to allow sharing information with others. Microsoft Office Live Essentials has all the features of Live Basics and Live Collaboration (starting at $29.95/month) with 50 e-mail accounts and web site traffic analysis and reporting tools. To sweeten the deal, Microsoft will renew your domain name annually for free. Also, if you transferred your domain name from a current registrar to Office Live, Microsoft will pay for any future renewals.

 

One could argue that the User Interface is too simplified and basic, and completion of tasks is straightforward with little configuration required – but that is exactly the key feature that I think will make this very popular with the small business owner. Think about it; how many of your current SMB clients use 100% of their desktop’s applications capabilities? How about 50% or 20%, or even less? Don’t get me wrong, certain features in Live Collaboration and Live Essentials still require Microsoft Office (2000 or later) installed on the client side. But from this point on, it’s no longer about technology. This is about business.

 

This is not only about providing cost-effective software delivery. It’s also about streamlining workflow, streamlining processes and efficiency. For instance, Live Essentials provides all the tools from web hosting, e-mail and calendaring to tracking and watching company assets, storing and sharing documents, employee management, and, of course, customer management. Through Shared Sites, users can create password protected workspaces for customers and vendors, and even share their accounting data from Microsoft Small Business Accounting and QuickBooks files. Now try that one on for size! Did I mention you can practically work from anywhere as long as you have Internet Explorer browser (5.5 or later), Windows XP and Office 2000 (or later)?

 

So here is where workshop attendees gave me numerous reasons on why SaaS wouldn’t fly in the SMB space, starting with the limited choice of applications compared to off the shelf packages. Opinions continued with line of business applications (LOB), the need for their customization and tight integration into internal business processes. Other arguments included concerns on data portability to another provider, availability and security tribulations.

 

One of the main arguments repeated was that customers had no control of their data, not knowing where it was stored, and that it would be foolish to entrust your business data to a server somewhere in Timbuktu instead of keeping it local. Well, my Grandma used to keep her cash under her mattress too.

 

Granted, these are all valid points to be taken into consideration. Despite these hurdles it appears that there is a trend toward accelerated adoption towards hosted applications in the coming years according to recent research by Saugatack Technology (http://www.saugatech.com). The research study discloses that SMBs will be embracing SaaS for mission-critical workloads at twice the rate as large enterprises between 2006 and 2008. This comes as no surprise. Just look at the current number of hosted application players that are already established in the game.

 

Microsoft’s new offerings will certainly appeal to the typical small business owner. There is minimal investment in hardware, no software licenses, no worries about backing up data, or gosh … paying a consultant a monthly service level agreement (SLA). One would think that this may be tough to compete with, but it really just weeds out the do-it-yourself business owners that don’t see the value in a consulting relationship in general. We all have had a client like that at one time or another and in the future, I will be happy to refer such clients to the self-service website.  

 

Still, do not underestimate the power of SaaS. It should not merely be considered as a re-packaging of existing applications for the hosted environment, but as a new-generation tool for business management. The way I look at it, SaaS will provide an additional avenue for IT solution providers to achieve value-add for the small SMB. Consider clients in a peer-to-peer environment who want to take advantage of server-based applications, but are unable to afford the cost, as well as geographically dispersed businesses looking for a common collaboration ground. There is room to expand the consulting practice to include SaaS. IT solution providers and VARs can use SaaS to supplement their service offerings by partnering with software vendors in the channel. Then there are always the smart clients who value the consulting relationship and want to take advantage of SaaS, but would rather hire you to manage the data integration into the new environment. There will be other opportunities to provide training and consulting, especially at the rate technology solutions are mushrooming, and new business opportunities will emerge as a result of the shift in the way business will be done.

 

Kevin Johnson, Co-President of the Microsoft Platforms & Services Division, talked about the growth of MSN and Windows Live services and Microsoft’s increased investment expenditure from $300 million a year to $500 million next year. This makes me believe that Microsoft is in the process of building a rather large infrastructure to host SaaS applications for the SMB market. In the end, it is all about providing the ultimate end-user experience to our customers, and the more choices I have to offer from the technology smorgasbord, the more satisfied my clients will be. SaaS – Friend or Foe?  You decide.

 

 

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SaaS according to Wikipedia: Software as a Service (SaaS) is a model of software delivery where the software company provides maintenance, daily technical operation, and support for the software provided to their client. SaaS is a model of software delivery rather than a market segment; software can be delivered using this method to any market segment including home consumers, small business, medium and large business.

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1 Comment

Filed under SMB PC Magazine

One response to “Oldie but Goodie – SaaS article from edition one of SMB PC magazine

  1. everybodysagenius

    Great article Harry,

    It is cool to see how far Saas-model tools have come in replacing enterprise solutions and just plain old human work. One area that I think is especially interesting is the area of document storage and project collaboration.

    One new Saas-model document storage and collaboration tool that is worth checking out is DocLanding, http://www.doclanding.com. They have some really cool security and document versioning and annotation tools. They are geared at small businesses. Check out a free account (up to 256MB) at http://www.doclanding.com.

    Keep up the great articles,
    Will

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