Digital Transformation | Hybrid Cloud | IoT

Monday, November 24, 2008

SaaS And Managed Services: Big Service Providers Plug In


Quick: Name the world's most successful software as a service (SaaS) companies. Most readers will likely mention Salesforce.com ... then perhaps NetSuite, two key players in on-demand CRM (customer relationship management) and accounting software, respectfully.

Salesforce.com and NetSuite certainly have momentum in their markets. But consider this: Big service providers and broadband providers like Cablevision and Verizon Business may be the best-kept secrets in both the SaaS and managed services markets.

With each passing day, I notice big service providers launching more and more SaaS and managed services offerings. Increasingly popular options include:
  • Managed and hosted unified communications
  • Hosted Microsoft Exchange and IBM Lotus Notes
  • Managed routers, switches and network infrastructure
Increasingly, big service providers provide both the pipe (broadband) and the applications flowing through the pipe (email, groupware, CRM, enterprise resource planning, and so on).

When Big Meets Small
Still, I'm frequently skeptical when big service providers strive to offer PC-like services and support to smaller organizations.

Conventional wisdom says small businesses are best served by VARs and solutions providers -- the folks who provide on-site consulting, integration and support services. Big service providers, critics claim, don't really have their fingers on the pulse of small business.

I think that's changing. Over time we'll see hybrid business engagements surface, where service providers and VARs outsource business engagements to one another.

In some scenarios, the service providers will host customer applications. In other scenarios, the VARs will continue to build and maintain network infrastructure for customers.

In all scenarios, small and mid-size businesses will seek predictable, steady IT costs by marching toward SaaS and managed services. Similar to how voice and IP came together in the late 1990s, SaaS and managed services are now inseparable.