According to Software as a Service providers -- who want you to run your business online -- SAAS has come of age. We put it under the microscope.Does your business really need the cost – or, perhaps more importantly, the hassle – of running its own communications and office software? Google certainly doesn’t think so. The search giant recently invited businesses to let it run their email, calendaring and productivity software for a modest US$50 per head, per year. Google joins Microsoft and a host of other companies in offering Software as a Service (SAAS), but are online applications now powerful, cost-effective and reliable enough for businesses? In this feature, we’ll examine whether it’s time to place your trust in net apps, or stick to the desktop approach.
Although the concept of delivering applications to a client computer or device has evolved over the years, the basic concept remains the same – applications are hosted and managed centrally and served to the client over a network connection on demand. At the height of the dotcom era, there was a concerted effort to establish SAAS as a viable option for businesses. Microsoft was at the forefront of this big push, but the company was smart enough to keep it at arm’s length, providing ISPs and services companies with the tools needed to offer popular Microsoft products such as Office, Exchange, SQL and even Windows in a hosted environment. Providers used client-side applications such as Microsoft Terminal Services and Citrix Metaframe to access the servers hosting the rented applications.
Like many dotcom initiatives, SAAS was a huge flop at the time, even though the concept was sound and popular with users. The mass market just wasn’t ready for this new way of receiving the apps, largely because broadband was in its infancy and there wasn’t the bandwidth to make SAAS accessible to all. It was a concept ahead of its time.
Fast-forward seven years and SAAS is back in vogue. “There’s now a widespread consensus among the movers and shakers in the industry that SAAS is an important and meaningful issue that can no longer be regarded as the lunatic fringe of software provision,” says Ben Pring, research vice president for Gartner.
Google vs Microsoft
So what’s changed this time? Microsoft has returned to the SAAS market, keen to defend its dominant position in the lucrative office software market, but now it’s selling heavily promoted Live products – email, instant messaging, project management and web tools – all of which are web based rather than needing a dedicated client application. However, Microsoft is already facing stiff competition from Google on both price and services. Having successfully taken on Microsoft’s Hotmail email service with Gmail, the search engine king has ventured further into hosted applications and services.
Google has recently upped the ante with the launch of Google Apps Premier Edition, a revamped version of its hosted applications and services designed specifically for the business market. The bundle brings together Gmail, Google Calendar, Google Talk (its instant messaging and VoIP application) and Google Docs & Spreadsheets, plus a customisable domain homepage service. “For Microsoft, Google represents a serious competitor and will provide the motivation to sort out its own SAAS offering, which is very patchy” says Bob Tarzey, service director at research firm Quocirca.
But this isn’t just a two-horse race. Companies such as ADS Portal offer conventional applications such as Microsoft Word and Excel via a hosted model. And there are plenty of alternatives to both Google’s offering and Office Live from lesser-known web-based software providers. Zoho offers a web-based word processor, spreadsheet, presentation tool, notepad, IM client and business planner. It even provides specialist business productivity tools such as a CRM system and a project-management tool.
There are also the specialist business software providers that use SAAS as
the delivery model for CRM, logistics management and accounting packages. NetSuite and Salesforce.com both offer the full suite of back-office and business-critical applications that a small, mid-sized or large company would run on its on-site client PCs and servers.