Small and mid-sized businesses now have an arsenal of
hosted services at their disposal, which they can access through a
web browser and a secure internet link.
As well as reducing the IT burden, they can use software as a
service (SaaS) to lower the cost of providing back and front office
business functions.
According to IDC, the SaaS industry is set to grow at 40% over
the next year alone, driven largely by the economic downturn as
companies look for quick returns on their investments.
Today, SaaS offerings have grown to cover human resources,
accounting, procurement, billing, customer relationship management
(CRM), sales and marketing, enterprise resource planning (ERP), and
business intelligence (BI).
Business management
Gooroo offers a whole
online business management suite which can be accessed via a web
browser or web-enabled phone, and is priced at £25 per user per
month.
This includes accounts, CRM, sales, stock control, and task and
people management and shows the user a dashboard of their business
operations.
Dean Miles, general manager of Gooroo Software said: "We
recently surveyed small businesses' plans to adopt SaaS and cloud
solutions, and there is real demand out there. SMEs want the same
software tools that are available to enterprises."
One of Gooroo's first customers is Allgas, a specialist supplier
and maintainer of gas and electrical appliances and accessories. It
deployed Gooroo's suite to help manage stock and sales, and to
support an e-commerce site.
Managing director Elaine Whylde said: "We were looking for a
cost-effective solution to provide a single, real-time view of our
central stock position, both internally and externally through our
planned e-commerce website. My old PCs, database and accounts
software cost £9,000 to buy and £1,000 a year to support, but the
Gooroo solution will cost me £25 a month per user."
Affordable business
tools
Business IT Online is another suite of small business tools,
and this one is priced from £7.95 per month for 5 user accounts,
making it one of the more affordable offerings in the market.
Business IT Online Finance has CRM and sales management,
invoicing, scheduling, file-sharing, marketing and local business
search and even an office supplies store.
David Cruickshank, chief executive officer of Business IT
Online, explained: "The idea is that we are 'SAP for the micro
business'. We offer a range of core services so that the small
business owner doesn't need to install a costly networked computer
infrastructure and VPN for remote working; buy multiple software
licenses; or go anywhere else for their needs."
Accounting
Aqillais an example of an
accounting package for SMEs that has been designed specifically to
be delivered over the internet, on demand.
The software was launched in 2006, and received investment from
finance industry veteran Bob Morton: "On-demand is a high growth
area, with companies of all sizes looking at this type of delivery
because it offers access to the latest applications, without the
need for high levels of capital outlay or the ongoing expense of
maintenance and management," he said.
Unified
communications
SaaS has left few software markets untouched, and with the
arrival of sophisticated web 2.0 technology, unified communications
is one of the more recent applications to arrive in the
browser.
CommuniGate UK's
Pronto! is a product which gives the user a web-based dashboard
that brings together their e-mail, collaboration tools, voicemails,
instant messaging, RSS feeds, videos and images.
The application uses a secure and fast Flash client to support
dragging and dropping of files from the desktop, as well as
multiple windows and sessions.
With tools like these, firms such as CommuniGate are clearly
aiming to challenge Microsoft's dominance in desktop productivity
tools.
Simon Paton, managing director of CommuniGate Systems UK, said
SMEs implementing a SaaS model for unified communications stand to
reduce their fixed costs and create a "highly flexible operation
that can respond rapidly to the forthcoming business highs and
lows".
Paton said that, in some areas such as CRM, there is little
differential in cost between the traditional and SaaS model.
"However, when it comes to the adoption of unified communications
the differentials are significant."
"Not only can an organisation completely remove all capital
expenditure but operational costs are typically reduced by one
third and are based on actual user numbers, enabling the business
to ensure fixed costs are aligned with resources," he argued.
Recruitment
SaaS has found its way into many new markets, such as
recruitment. Taleo is a
SaaS-based talent-management product for SMEs, which can simplify
recruiting, hiring and performance management, according to the
firm.
Taleo marketing director Chris Phillips said: "Organisations of
all sizes need to understand the costs incurred through poorly
managed recruitment and ensure that they have an automated system
in place that can provide valuable cost savings to the bottom
line."
Managed EDI
Many organisations use the EDI data format to send
business-critical documents, such as purchase orders, delivery
notes and shipping notes, between suppliers and retailers.
One SME that has benefited from a Saas-based EDI service is
drinks maker Innocent.
Innocent said it has relatively limited IT staffing, but needs
to communicate with retailers around the clock. It uses a managed
EDI service from Inovis, which has helped to remove the complexity
of sending documents back and forth.
Managed EDI also has a flat-rate pricing structure, so costs are
predictable and low, said the firm.
John Redfern, managing director EMEA at Inovis, said,
"Exchanging data with retailers is a complex business. Inovis
addresses this by managing the whole process, from hosted software
on a user-friendly platform, to translating data into required
formats and integration into back-office EDI systems. This leaves
the business free to focus on strategic IT activities."
Document management
Like EDI, SaaS has enabled smaller organisations to have the
sorts of document automation used by larger enterprises. One
example of a SaaS document automation provider is
Esker, which specifically
helps SMEs to automate paper-based processes, to help save time and
cut costs.
Esker's SaaS services include sales order processing, accounts
payable, accounts receivable and purchasing automation.
James Elkington, managing director of Esker, said, "Our
on-demand model ensures that SMEs have access to the same benefits
that have traditionally only been available to large organisations
with big budgets and dedicated IT teams.
"For example, with accounts payable automation, it is estimated
that organisations can save between 40 to 60 per cent of accounts
payable operational and administration costs."
Storage
This April saw the launch of one of the industry's first
cloud-based file archiving services, Virtual File Store from
Iron Mountain
Digital.
The firm provides storage-as-a-service (STaaS) for backing up
and archiving enterprise data, and its new service aims to provide
secure, long-term storage of inactive data off-site.
Richard Ellis, manager of Channel and Direct at Iron Mountain
Digital, said the benefit for SMEs of using cloud-based storage are
that no large capital investment is required, and it fits into a
monthly operating budget.
He added that the storage service can scale up as the business
requires, and this can cover short-term storage spikes, as well as
long-term structural changes such as acquisitions.
One-stop shops
One trend that is rapidly emerging is for SaaS service providers
to offer whole suites of applications, from the back to the front
end, arguing that businesses prefer to go to a single vendor for
their IT.
One such firm is
ThinkGrid, which provides
business IT on demand for SMEs, with applications that include
Sage, Microsoft Sharepoint and Visio.
ThinkGrid also actively encourages its customers to tell them if
there are other line of business or specialist applications they
would like made available.
"It's much less hassle and cheaper for businesses to use just
one provider for all their applications," said Rob Lovell, chief
executive officer of ThinkGrid.
"The SaaS model means that SMEs can get the latest software and
required infrastructure at a low, monthly cost, rather than having
to go through the headaches of upfront investments, installation
and upgrades themselves. SMEs don't want to be dealing with
multiple service providers and that's where we come in."
But ThinkGrid is by no means alone in the market. The likes of
SAP, Oracle, Microsoft and Google are building up their SaaS
portfolios. Meanwhile, established SaaS firms such as Salesforce
and Netsuite continue to build their presence, making it rich
pickings for SMEs looking to embrace on-demand software.