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More Services, Less Software

Tech problems dissolve when you have enough SaaS.

You probably have overheard these words: software as a service. You may even have nodded knowingly despite not knowing much more than that they're more easily digestible as the acronym SaaS (rhymes with the thing that holds your evening martini).

It's pretty easy to get swept up in technology debates about what constitutes SaaS--is it the same as cloud computing or different? But you know what? You don't need to know what it is; you just need to know what it does for your growing business. As for what it does, we'll answer that question with another: What if you no longer had to spend thousands of dollars a year on communications gear, computer software and overall internal IT management?

"SaaS can have the same effect that car leasing had in the auto industry," says Siamak Farah, CEO of InfoStreet, which offers SaaS solutions to small businesses. InfoStreet offers SaaS in the form of a business management software platform, StreetSmart, that supports a variety of functions, including e-mail, conference calling, file sharing, customer relationship management, calendar tools, portal access, data synchronization, site administration and more. It's a hosted platform requiring no new hardware or software.

A SaaS platform has to have five attributes, Farah says. "It has to be fully managed and hosted; allow the customer recurring payments; be supported by a large-scale, secure multitenant infrastructure; support anytime, anywhere access; and can't require specialized software to be installed. It really needs to work anywhere there's a browser."

The benefits to the small-business owner include no upfront infrastructure cost, less risk of data security and reliability issues, and ubiquitous authorized access that the business owner can control.

Chris Hubble, vice president of brand strategy at international market research firm DB5, likes the sound of that. Hubble says his San Marino, Calif., firm saves an average of $10,000 annually by having InfoStreet manage its e-mail, scheduling, data storage and IT maintenance needs versus buying its own storage servers and having an in-house IT guru. The reliability of the SaaS approach also helps DB5 save thousands of dollars more that it might otherwise spend on downtime resulting from communications and IT issues. And DB5 gains the potential brand appeal from an outsourced, automated system that helps it appear more like a corporate titan than a small business--key for a firm with big clients such as GE, AT&T and Girl Scouts of the USA.

"It's just a positive, cost-effective thing to do for your business," Hubble says. "At my old company, we could never crack these IT issues, but here, with SaaS, it's like night and day."

Dan O'Shea is a Chicago-based writer who has been covering telecom, mobile and other high-tech topics for nearly 20 years.

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This article was originally published in the January 2010 print edition of Entrepreneur with the headline: More Services, Less Software.

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