Ed Lucente is a Sr. Product Marketing Manager at AT&T. You can find more blog content from Ed and other experts on emerging technologies on the AT&T Networking Exchange Blog. AT&T has sponsored the following blog post.
Before the advent of cloud services, IT was managed ad hoc by small businesses (less than 250 PCs). This included tasks like on-premise server installations and maintenance, software upgrades, database administration, network management, and backups. Small businesses faced difficult IT challenges related to increasing operating expenses, unending complexity, and a lack of trained resources. IT management and costs distracted small businesses from focusing on building better solutions for customers. Fortunately though, Software-as-a-Service (SaaS) applications have changed this malaise. Today, SaaS services are allowing small businesses to increase productivity and competitiveness, reduce IT costs, and develop solutions that create customer intimacy.
Productivity and Competitiveness
A survey commissioned by Microsoft showed that of the small businesses that use the cloud, 41% said they were able to employ more staff in roles that directly benefit sales or business growth, 39% invest in more product development or innovation, and 37% experienced improved agility and competitiveness. The cloud has made it easier for small businesses to scale their business to explore new markets, according to 42% of respondents. And 52% said that using the cloud enabled them to add new solutions and services that benefit their business more quickly and securely.
Small businesses also need ready access to global markets in order to grow and compete against established enterprises. SaaS solutions facilitate this by delivering a wide range of powerful, yet affordable, business or office applications in these areas:
- Customer relationship management (CRM) and sales force automation (SFA)
- Revenue performance, corporate performance, and financial planning management
- Office productivity (email and collaboration)
- Marketing / campaign management
- Human capital management (HCM)
- Business intelligence (BI) and reporting
- Website and blog development
- Backup and disaster recovery (DR)
- Enterprise resource planning (ERP)
- Expense management
- IT service desk
Jeff Kaplan, founder and CEO of THINKstrategies, a consulting services company, points out in the CIO’s Guide to Software-as-a-Service that:
SaaS solutions enable customers to quickly and easily acquire essential business applications without a significant up-front capital investment in perpetual software licenses and additional hardware systems. They also avoid extended deployment cycles and added consulting and support costs. SaaS solutions have also been specifically designed to be more flexible and accessible for a highly dispersed and variable workforce than legacy applications. (Source)
SaaS Cost Advantages
In another white paper entitled Cloud Services Opportunity in the SMB Market for Traditional Telecom Service Providers, Gerald J. Canavan illustrates specifically how small businesses have more affordable access to office applications via the cloud (i.e., SaaS), which achieves important savings. Small businesses, for example, have seen their IT costs drop due to Software-As-A-Service-delivered solutions like Microsoft’s Hosted Exchange email. Take a look at these studies from Microsoft and Osterman Research:
Microsoft 365 Pricing
Microsoft Hosted Exchange Pricing – A Business Case for Hosted Exchange Email
Finally, McKinsey’s study, Winning in the SMB Cloud, does a good job detailing the positive impact of cloud applications on small business:
With cloud services, small businesses are able to reap the benefits of not having to deploy Email and File Servers, Backup systems and other physical infrastructure as well as local software installations. While this grants an immediate cost benefit to business, cloud services are often subscription-based from month-to-month, so you only pay for what you use, when you use it. When used effectively, it can become the enabler that allows everyone in the business to easily collaborate together on any project, regardless of their computer system, computer software, or geographical location.
We’d like to hear from you. Do you believe small businesses are taking enough advantage of Software-As-A-Service applications to improve productivity, competitiveness, and solution development? We look forward to your comments.