Cloud-Based Software Delivers Savings for Businesses of Every Size

Applications that live in the cloud, also known as Software as a Service (SaaS) and hosted or online applications, are proving to be useful tools for businesses looking to save money and ease the burden on IT. A growing number of organizations are signing up for applications such as Microsoft Exchange Online and SharePoint Online, for example, and those who haven't yet signed up are listening.

The high-level benefits of an online application strategy are compelling: ease of adoption, ease of use, and a pay-as-you-go model.

"This provides companies with an accelerated time to value, lower risk, and greater functionality for organizations with a dispersed workforce who benefit from better communication and collaboration," says Jeff Kaplan, founder and managing director of ThinkStrategies, a consulting company that focuses on on-demand services.

Of course, the proof is in the numbers. The results of a recent SaaS online poll conducted by ThinkStrategies in conjunction with Datamation, found that 83 percent of respondents were currently using one or more SaaS solutions and the bulk of the remaining respondents were considering using online applications.

A more expansive 2010 U.S. Cloud End User Survey of IT decision-makers from Frost & Sullivan found that 21 percent of respondents currently use SaaS applications with another 22 percent planning to implement in the next 12 months. The survey population was split evenly among small, midsized, and large businesses.

According to Lynda Stadtmueller, senior research analyst at Stratecast, a division of Frost & Sullivan, as the application burden among all business segments grows, the more enticing a hosted application strategy appears.

"With the demand to run more applications, companies are seeing an increasing strain on both IT personnel and physical resources," says Stadtmueller, pointing out that up to 85 percent of IT time and resources in large organizations are spent on application maintenance alone.

Included in the federal government's Cloud Computing Initiative is the push to look at and use SaaS to, among other things, eliminate upfront capital expenditures and dramatically reduce the administrative burden on IT resources.

The appeal of cloud-based applications is clear. Businesses are no longer responsible for purchasing, configuring, loading, and maintaining applications on their own hardware. "All that's needed is an Internet connection," says Stadtmueller

A Closer Look
Hosted e-mail services have been around for years, and today e-mail remains the most popular type of SaaS application, garnering 59 percent of hosted-application subscribers according to Frost & Sullivan's 2010 U.S. Cloud End User Survey, followed by 56 percent for collaboration applications and 55 percent for business productivity software.

Microsoft Exchange Online and SharePoint Online offer both small and large businesses a cost-effective way to offer potent messaging and collaboration software to all employees.

Exchange Online eliminates the care and feeding of on-premise solutions and delivers the same sophisticated messaging capabilities, e-mail, and shared calendars and contacts as Microsoft Exchange Server.

The vendor's hosted enterprise solution is based on Microsoft Exchange Server 2007 and provides improved e-mail security; access to e-mail from anywhere for employees; enhanced operational efficiency for the customer's internal IT staff; and 25GB mailbox storage per standard license.

Exchange Online can be purchased directly from Microsoft or from participating Microsoft Channel Partners. Expect to see hosted Exchange 2010 to roll out over the next several months, bringing the latest server features to the cloud and giving IT administrators greater control, improved customization, and enhanced coexistence between Exchange Online and Exchange Server, according to Microsoft.

Microsoft Gold Certified Partner 123Together.com in Waltham, Mass., is a leading provider of hosted Exchange Server. Its service includes features such as:

• Universal Mail Access: Anytime, anywhere access to e-mail folders, files, contacts, and calendars via Microsoft Outlook or any browser.
• Groupware and Collaboration: Share any e-mail folders, files, contacts, and calendar with any co-worker, project team, or within a department.
• Virus Scanning: For all incoming and outgoing e-mail.
• Server Backup: Daily e-mail backup.

According to Ravi Agarwal, senior executive officer for technology innovation at 123Together.com, hosted Exchange makes good business sense for companies of all sizes and across all industries, especially those organizations responsible for maintaining confidentiality, proper document retrieval, and regulatory compliance.

About 75 percent of 123Together.com's hosted Exchange customers are first timers, according to Agarwal. The customer base consists of organizations that are moving to hosted Exchange from on-premise Exchange and businesses whose IT staff used Exchange in the past and are moving to a hosted Exchange model.

"Another 20 to 25 percent of customers are small-to-medium businesses (SMB) who as they grow realize they need better collaboration tools for their employees," he says. Hosted Exchange is an affordable way for companies to get on board with Microsoft Exchange.

An outstanding opportunity for potential Exchange customers is the option to try hosted Exchange risk-free for 30-days.

Optional hosted features such as two-way synchronization between Exchange and smartphones, e-mail encryption for SMBs, and secure hosted e-mail archiving are additional benefit of turning to hosted application providers like 123Together.com. For larger organizations that can get over the hurdle of having company data reside elsewhere, one of the biggest benefits of hosted Exchange is migration cost.

"If an organization is running and older version of Exchange on premises and is pushed to a decision to migrate to Exchange 2010, it's too enticing pricewise not to consider a hosted strategy," says Rob Horwitz, CEO and research chair at Directions on Microsoft.

Horwitz notes that Microsoft made Exchange Online extremely appealing for all businesses when it slashed the cost by half late last year.

Businesses may also consider a hybrid Exchange strategy whereby IT maintains a core base of users on premise and adopts hosted Exchange for contractors or other sectors of the organization.

Cloud-Based Collaboration Software
Newer to the online app services game is Microsoft Office SharePoint Online. Based on Office SharePoint Server 2007, Microsoft's hosted solution enables employees to easily create and manage custom team and project-focused sites for collaboration and document sharing. Microsoft handles setup, provisioning, ongoing maintenance, and upgrades to the customer's SharePoint Server Infrastructure, reducing the workload on the customer's IT resources.

Whether turning to the vendor or opting to work with a Microsoft Channel Partner, the cost savings and flexibility benefits of adopting a hosted SharePoint strategy mirror those of adopting a hosted Exchange strategy.

Aligning with a hosting partner can be a real boon to companies with a small IT group. "There's a point at some organizations where SharePoint is more of a cost center than a hub of innovation," says Al Hilwa, program direction, applications development software at IDC.

Microsoft Gold Certified Partner Fpweb.net is the largest SharePoint hosting provider worldwide with 1 million users in 80 countries. The first and only company to host SharePoint back in 1999, Fpweb.net knows hosted SharePoint saves customers from SMBs to the enterprise 35 percent to 60 percent in general IT costs over an on-premise solution.

"Our advantage is cost savings, go-to-market quickly, and expertise. And with that comes peace of mind for our customers," says Rob LaMear, CEO at Fpweb.net.

The online app provider offers two flavors of SharePoint: the QuickStart Business Suite (SharePoint AppFoundation) for a more intranet out-of-the box solution for $495/month (app only) or QuikStart Business Suite (SharePoint AppServer) a more robust and customizable solution for $795/month (app only).

"We support third-party web parts, or widgets, and we offer Active Directory integration securely connecting a company's private cloud to ours," says LaMear.

Fpweb.com is signing up customers for three flavors of a SharePoint 2010 hosted offering: Foundation, Server Standard, and Server Enterprise, with each offering built on the six pillars of SharePoint 2010: Insights, Communities, Composites, Content, Search, and Sites.