SMEs look to converging tech

By Alex Kayle, Senior portals journalist

Johannesburg, 06 Aug 2009

Technology convergence and falling telecommunications costs are driving software-as-a-service (SaaS), says Richard Firth, chairman and CEO of MIP.

Firth explained at the ITWeb SaaS conference, held in Midrand, this week, that voice over Internet Protocol, e-mail, and document management are converging and becoming more business-critical.

Firth said: “Hardware, software and networking have come together to play a massive role. Network speeds are finally useable and increasing and network costs are reducing.”

SaaS is becoming more accessible to the small to medium enterprise (SME), according to Firth. SaaS is agile because the business only pays for what it uses, normally on a month-to-month contract versus up front capital costs.

Alan Richards, MD of CQuential Solutions, a provider of warehouse management solutions, agreed with Firth, pointing out that three technologies have converged, namely mobile computing ADSL/3G, and high performance supporting software.

Richards argued that traditional enterprise resource planning (ERP) systems can cost millions and thousands of hours to implement. He pointed out that SaaS hosted on the Internet is cheaper and brings more return on investment, especially for SMEs.

“SA has 50 000 warehouses and less than 5% of those warehouses have good systems in place. Warehouses are high-cost and resource-intensive but add little or no value to the products. Their operations are complex, ever-changing and hard to manage well. The total cost of ownership of ERP systems is too high for SMEs and is restricted to the large enterprises.”