SaaS Continues Move Forward

Software as a Service (SaaS) seems to be gaining ground. At least, that’s the word from In-Stat and a handful of other xchange sources.

According to the research firm, over the next 12 months the percentage of U.S. companies implementing SaaS-based business management applications will approach the percentage of firms deploying traditional licenses for those applications.

Service providers such as Cbeyond Inc. and Virtela Communications Inc., and software giant Microsoft Corp., are among the companies helping to move SaaS forward.

“For its part, Cbeyond, which for some time has offered about 30 applications as part of its basic service provider, earlier this year added Hosted Microsoft Exchange to its portfolio in an effort to make small businesses run more efficiently,” said Paul Gies, senior director of products at the managed service provider. This recent addition gives small business customers all the capabilities offered through an enterprise-class e-mail system. These include appointment scheduling, shared contact information, over-the-air syncing and more via Microsoft Office Outlook on their desktop, laptop, a Web browser, or a smartphone for $10 per user, per month, according to Cbeyond.

“By working with Microsoft, we can now offer Cbeyond’s customers the first hosted service based on Microsoft Exchange Server 2007 that is fully integrated with mobile access, all from a single provider,” said Brent Cobb, vice president of product marketing for Cbeyond. “We’ve seen significant customer demand for this service; delivering a seamless, enterprise-class messaging and collaboration experience to our SMB customers will give them the ability to compete using services traditionally reserved for large enterprises.”

Thomas Group Capital is one of the SMBs using Cbeyond’s Hosted Microsoft Exchange service. Greg Vincent, president and CEO at the Atlanta brokerage firm, told xchange his company, a Cbeyond customer since November, adopted the service this January. He said Thomas Group Capital was happy to move its email application off its own four-year-old server, which it was concerned might fail, and onto the Cbeyond network where they can maintain and monitor the application. He said the fact that the service is available via Blackberry also gives his firm added reliability in case its endpoint terminals in the office go down.

Steve Zimba, managing director of global telecom business for Microsoft Communications Sector, added that Microsoft had not done a lot with integrated mobile/PC email until the Cbeyond deal, but said that more integration for Hosted Microsoft Exchange will be forthcoming. According to Zimba, Microsoft is looking to tightly integrate its hosted platform with other offers, such as unified communications and its Response Point phone system. In fact, he added, Cbeyond and New Global Telecom Inc. in April announced plans to offer VoIP services based on Microsoft’s Response Point solution.

In other recent news on the SaaS front, Virtela this spring named Steven R. King as president, CEO and a board member, a move the company said is aimed at helping it expand its managed services/SaaS portfolio and drive growth.

The Denver, Colo.-based company provides enterprise customers with such solutions as MPLS- and IP-based VPNs; security services based on a SaaS model; remote monitoring and management of WAN/LAN infrastructure; and converged data, video and voice. And the company has seen seven consecutive quarters of positive net income, and sales orders jumped 40 percent in the first quarter over the same period last year. But the company believes there is even more upside to the “network as a service” opportunity, as Virtela calls it, and so has brought in King.

Most recently King led ZANTAZ Inc., which under his seven-year leadership grew to be profitable and was recently acquired by The Autonomy Group. King told xchange there are many parallels between Virtela and ZANTAZ, which provided managed and SaaS-based services, including storage as service, for enterprises.

“I’m a big believer in that model,” he said, adding Virtela aims to target the global mid-market, which it believes is underserved. “We saw how powerful it can be to create a set of solutions which businesses don’t typically have the assets to deploy themselves.”

Will Stofega at IDC, said “the SMB market continues to be vastly underserved from a technology perspective despite improved network reliability and decreased operating costs.” But, he added, services like Hosted Microsoft Exchange from Cbeyond address “many of the pain points that have kept SMBs from adopting corporate-class IT tools” such as familiarity and ease of use with Microsoft applications, a low cost of entry and packaging with other popular communication services for simplified billing and management.

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