Software as a service and what it means for you?
Feature from: DOMINION POST, WAIKATO TIMES, CHRISTCHURCH PRESS MARCH 31, 2008
A current buzz phrase in the market is ‘software as a service’ - so what is this and how will it impact the SME sector?
SaaS is essentially the delivery of software over a web interface. Using this model, the business owner does not pay for software - merely for the use of it monthly per user.
This has many advantages. Firstly, the management and updating of software is managed by a third-party. This generally also includes data management, back-up and security. Depending on the application and its uses in the business, cost savings here may be a good enough reason to consider this solution..
Secondly, the business no longer has to purchase software outright but can pay monthly for individual users to access individual programs. This means no capital outlay on software or configuration of business applications and growth or downsizing of businesses becomes very manageable.
As the software pricing is modular and monthly, you can add and remove users and/or applications month to month providing huge flexibility in growth and cashflow management.
It is important to be careful about where data ownership lies. You should negotiate guaranteed release timeframes for data within your contracts in case you want to take your business elsewhere.
Thirdly, access to this medium is usually via secure web interface so the software becomes utilised anywhere there is internet access available. This is ideal for those with traveling staff or multiple branch setup.
Final benefit is the ability for the SME sector to access software, delivered as a service - generally reserved for the corporate sector due to price and scalability.
Currently the highest market saturation for SaaS is in Customer Relationship Management (CRM), email and accounting software packages.However the range of products available is growing rapidly here and abroad - a New Zealand example being online accounting package Xero.
With increased Broadband speeds to bring us up to international standards, we will also see widespread use of cost-effective video conferencing on this platform.
Depending on the application and the connectivity availability, there are solutions available now for just about every major application set.
Interestingly, the whole SaaS idea isn’t new. During the 1980’s, there was a plethora of DOS and UNIX based programs that gave employees zero control over functionality and choice.
Staff were given access only to the programs needed to do their work within a business system. The Internet as we know it did not exist.
The PC revolution saw the development of GUI (Graphical User Interface). Whereas previous systems were command based, this led into real-time convergence with the worldwide web.
Through the early 2000’s, business owners were in a situation where employees had too many choices and they had less control over what employees did within the IT architecture.
The SaaS model allows business owners control, even to the extent of allowing no Internet access at all. Access can be restricted easily user by user and application by application in a manner not seen since the DOS heyday
The major issue regarding SaaS in New Zealand is the fact our Broadband service lacks the firepower needed to allow us to fully use the power of this medium - although ADSL2 connectivity should go someway to rectifying this.
SaaS is only as good as your connectivity. If your line is down, your applications are down, which highlights the importance of managed routing.
But, SaaS is already dramatically changing the software industry internationally. If you haven’t considered your options within this sphere, you should be consulting your IT provider for guidance.
Patrick Kershaw is a Business Partner for Horizon Pacific, a nationwide technology support provider specialising in assisting SME’s with all their technology requirements. For further information, go to www.horizonpacific.com
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