Software as a servicecould stall if
the UKdelays rolling out greater
bandwidth.
Software as a service (SaaS)
could make a profound difference to
small- and medium-sized companies, allowing them to
replace desktop and server software with lower-cost IT services on
the internet.
But a
report published this week by
the Broadband Stakeholders Group, a coalition of broadband
users, providers and government, warns
UK firms might have to wait before they see the benefits.
"A large-scale transition to computing and software as a service
for SMEs is only likely to come about when broadband is fast and
dependable -
when next generation access is available," it said.
The Broadband Stakeholders Group (BBSG) said next-generation
broadband will allow more IT departments to move to a hosted
service by improving the reliability and speed of connections. The
report singled out SMEs making the greatest savings through
SaaS.
But unlike large enterprises - that can already afford fast
private broadband to run SaaS -
many SMEs would have to wait for public fibre connections to be
rolled out before migrating to SaaS, said Carl Bate,
UK CTO at Capgemini.
"When you rely on a network connection to access your business
software, then absolutely delaying the roll-out of fast broadband
will delay mass adoption of SaaS among SMEs," he said.
According to the
Department for Business, Enterprise and Regulatory Reform, SMEs
account for 99.6 per cent of all UK businesses and provide 51.9 per
cent of total UK turnover.
The BBSG estimates SaaS would save companies £350 every year per
person in support costs. If 30% of small-enterprise staff used
SaaS, the savings across the UK would total £620 million a
year.
Paul Turner, VP global operations at Arieso, has been using SaaS
applications for a year. The company, which has fifty staff, has
saved a quarter of the cost of using desktop software.
"Having a reliable internet connection is essential for
delivering SaaS. In the future, as features become more
sophisticated, I could see the need for faster connections," said
Paul Turner.
Denying SMEs access to the latest computing technology could
dent the UK's gross domestic product (GDP). Evidence points to a
strong contribution of ICT to overall productivity and GDP growth,
said the report (see graph).
"If UK firms don't have this fast connection to make use of the
latest technology like SaaS, their ability to interact with the
market and their competitiveness diminishes," said Bates.
Research firm Gartner said 25% of new business software will be
delivered as SaaS by 2011 because testing, integrating and
upgrading software can be more expensive than the software itself.
These costs are reduced when delivered as a hosted service.
"Growing intolerance for misspent investments on shelf-ware
motivates buyers to seek on-demand software," said Gartner research
director Alexa Bona. "Painful reminders of lengthy, unsuccessful
deployment cycles motivate buyers to investigate simpler
alternatives."
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