Renting software and accessing it through a website sounds like a good idea and has been pushed endlessly by sections of the IT industry, but the idea has been having trouble gaining traction. But analysts now seem to have a better fix on the SaaS (Software as a Service) trend and they say small to mid-sized enterprises (SMEs) are coming on board.
Springboard Research is predicting spending on SaaS in the Australia-New Zealand region will be more than $506 million by 2010, with a compound annual growth rate of 65 per cent.
The biggest uptake comes from customer relationship management (CRM), which has captured 51 per cent of overall spending.
While global players such as Salesforce.com, WebEx, Oracle, RightNow and NetSuite control about 75 per cent of the market, local vendors including Aussiepay, WebCentral and Saasu are pushing their way in. SMEs represent a niche market that is beginning to open up.
SaaS makes sense for companies battling to control the cost of software acquisition and maintenance, but only if they can see a genuine return on investment (ROI).
To achieve that return they must be contract savvy, know what they are signing up for and the best way to pay for the service. Among other precautions they must ask if there's an exit charge and add-on costs, say for training or configuration, and lock in service and performance-level agreements.
A Forrester Research study has compared the return for SaaS with the return for on-premise software, and found the SaaS model yielded a better ROI and lower cumulative costs for SMEs.
Phil Hassey, country manager for Springboard Research Australia and New Zealand, says: "Faced with demanding business environments, escalating IT expenditures and increasingly complicated IT systems, many enterprises have turned to SaaS as an alternative solution."
Simon Burke, the managing director of Australian private company, IPscape, believes the ROI makes sense for companies that need a lot of flexibility. IPscape has developed its own technology for the contact centre market.
Its software takes account of inbound, outbound and a blended version of both activities, but takes the service further by including the connection with the contact centre's telecoms service provider.
"This allows them to control costs better," Burke says. "The real value is in the flexibility it offers to SMEs."
IPscape counts among its customers Teleperformance and local cosmetic company Nutrimetrics.
Another operator in the SaaS area is Citrix Online, a division of Citrix Systems. Managing director Asia Pacific, Harry Roy Shiever, predicts more than 50 per cent of Australian SMEs will be using at least one SaaS solution by the end of the year.
Citrix Online products, such as GoToMeeting, GoToWebinar, GoToMyPC and GoToAssist, are all delivered as SaaS.
Local company Leap Legal is marketing GoToAssist for CRM. Leap provides software and software support services for Australian law firms.
According to Leap, many of its customers are not technically savvy, which makes it hard for Leap's help desk to diagnose and fix problems over the phone. It now provides a remote support system by leasing GoToAssist, allowing help desk technicians to take control of customers' computers and trouble-shoot their software problems.
Leap Legal says deploying SaaS has cut staff costs by about $120,000 a year and boosted productivity.
OCIS (Oceania Customer Interaction Services), which provides an outsourced contact centre service, was finding it hard to hire agents in Australia's tight labour market. It was able to recruit a team of agents and set up a second contact centre in Fiji. The problem it faced was how to control the two centres as if they were one site.
"The answer was clear," says OCIS technology director, Andrew Kaszubski. "Create a virtual contact centre."
To do this, OCIS used Genesys call centre technology hosted by Global Speech Networks, built around a pay-as-you-go model.
"The decision to go with a hosted offering wasn't easy - trusting a third party with our technology was a real leap of faith," Kaszubski says. "But from a cost/benefit analysis the ROI was compelling. We pay Global Speech Networks for business value actually delivered."
Australian Financial Review
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