Telecoms 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.
 | | | | | When it comes to technology
adoption, those companies will go towards trusted advisors and
established relationships to help navigate those
purchases.
Erin TenWolde
senior analystIDC |
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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."
Jeff Kaplan, managing director of consultancy ThinkStrategies
Inc. in Wellesley, Mass., said, " I think we're going to see more
of this." Internet service providers and other telecoms are seeking
ways to differentiate themselves by offering a "fuller suite of
services that can enhance their position and better serve their
customers," he said.
Jamcracker is essentially a wholesaler of SaaS products. It
aggregates applications from independent software vendors (ISVs)
and SaaS providers and offers them on a single platform for channel
partners such as XO to deliver to SMBs.
"[Jamcracker is] an aggregator of SaaS providers and they enable
them through a platform that provides provisioning and billing and
all of that, all the essential stuff that a lot of ISVs need in
order to convert their products to SaaS," said Mike West, vice
president of Westport, Conn.-based research firm Saugatuck
Technology Inc. "If you're going into SaaS, it's a considerable
investment in processes and infrastructure that you as an ISV might
not have."
Recent research from Saugatuck revealed robust growth in SaaS
adoption by SMBs. The firm reported that the adoption rate rose
from 9% of SMBs in 2006 to 27% in 2007.
Kaplan said a platform like Jamcracker is important to SaaS vendors
that have struggled with direct sales approaches to the SMB
market.
"They've all been trying to better understand how to use the
channel to expand their market penetration," Kaplan said. "It comes
down to ease of use. What a lot of end users are trying to do, as
well as channel partners, is leverage software in the most
efficient way possible. For the channel partners, this represents a
strategic sourcing decision. It makes it a lot easier to pick a
single platform like this rather than having to aggregate all these
SaaS products individually."
XO will initially offer a suite of SaaS products that provide
communication, collaboration and data protection services. It will
include SaaS versions of Microsoft Exchange and SharePoint,
antivirus and antispam technology, mobility services, online backup
services and an IP-based virtual private network for remote
workers. SMBs will pay $2-$15 per user to subscribe to the SaaS
products with XO. Charlie Cary, vice president of small business
services at XO Communications, said his company will offer
additional SaaS products via Jamcracker as time goes on.
"The services we're offering now are closest to the telecom
services we already provide," he said. "I think it's an easy segue
to talk about other applications they need. I do think this is
where the market is going."
Let us know what you think about the story; email:
Shamus McGillicuddy,
News Writer