SaaS drives business growth

By Staff Writer for Integr8
Johannesburg, 06 May 2009

The model for capital expenditure associated with the procurement of services from software applications is changing - and rapidly, says Robert Sussman, joint CEO for the Integr8 Group.

“South African businesses are fast adopting software-as-a-service (SaaS), the foundation of which is a global migration from transactional-based capital purchases to a monthly fee inclusive of hardware, software, upgrades, licences and management.”

According to Sussman, it is fair to suggest that SaaS is a major driving force behind local and international ICT infrastructure management and commercial application. He believes its steady growth can be attributed to the cost-efficiency benefits it brings.

Many businesses are now focusing on efficiencies and striving for decreased operational costs. SaaS affords the opportunity for remote workers to gain access to applications over the Internet from anywhere in the world,” he says.

“If we look at the global markets and take the trends that have emerged out of the US market, we can forecast a more accurate trend for the local South African market - after one applies a factor for our locally more restrictive conditions regarding cost of bandwidth, latency, last mile connectivity and slower adoption rate.”

Sussman points out that in an increasingly competitive business world, some of the bigger SaaS customer relationship management (CRM) systems are making their way onto the local market. These include Salesforce.com as well as Microsoft CRM.

He says once companies adopt the hosted CRM strategy, a clear direction for hosted portal-type applications (like Microsoft's SharePoint) is imminent.

With the introduction of increased fibre capacity for last mile access and the undersea cables from Seacom and Eassy, SA will see a substantial increase in bandwidth, a decrease in latency, and improved price point, according to Sussman. He claims this will result in increased adoption of VOIP technology, inter-branch connectivity, hosted PBX, and reduced telephony costs.

“I believe the trend going forwards is for a gradual but most definite increase in demand for SaaS, with an ultimate environment consisting of a hybrid of both SaaS and on-premise hosted computing,” he concludes.