Software-as-a-Service Opens New Markets for Small Businesses


Let’s face it, Software-as-a-Service (SaaS) application services make it much easier for small businesses to manage their IT administration and improve IT productivity. When I started my career with IBM in 1985, I called on small business owners constantly, and I know from experience that back then nearly every business owner complained about headaches associated with managing IT:  from new hires walking out the door; to PC networks (Novell, Ethernet, IBM Token Ring, Banyan) that were too darn complex to manage or scale; to unpredictable hardware and maintenance expenses.

Flash forward twenty-seven years. Now we live in a world where just about any small business or startup can literally farm out application and infrastructure services to the cloud. This eliminates laborious and expensive IT administration and allows business owners to truly focus on what they should be focused on:  developing better application solutions for their customers to out-compete incumbent global competitors and deliver better customer service.

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:

  • 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.

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 SaaS-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 SaaS applications to improve productivity, competitiveness, and solution development? We look forward to your comments.
Ed Lucente Network Application and Cloud Solutions Application Sales Executive AT&T About Ed