A field guide to software as a service

Gartner analyst Ben Pring also sees increased SaaS adoption by independent operating units and by branch offices of larger companies. “The business unit executive puts in a request to IT for application support, and IT says, ‘We’re busy. Get back to us in September.’ So he goes off on his own with an SaaS provider to get going quickly and expenses it as an operating cost,” Pring says.
-- Leon Erlanger

Free IT resource Open Source Business Conference (OSBC) May 22-23, 2007 Sponsored by OSBC Free IT resource Virtualization Insights from Top Experts - Learn how virtualization gets real! Sponsored by Dell Return to special report DOWNLOAD PDF Click here to download InfoWorld's special report Software as a Service

Messaging

Messaging has become a major pain for companies large and small. Significant IT resources must be devoted to managing mailboxes, archiving mail, coping with spam and viruses, filtering content, and meeting compliance requirements.

“Global companies have to deal with the Patriot Act, different regulations in different countries, and all the issues around data security and privacy,” IDC’s Konary says. “We see many considering SaaS because their in-house tools are very cumbersome or they simply can’t do the type of reporting and tracking that’s needed. Many SaaS providers have already developed their e-mail applications for reporting and can pull out that information fairly easily.”

The messaging SaaS market breaks down into complete e-mail hosting solutions and e-mail security hosting. Security hosting is designed to appeal to companies that prefer to devote their own resources to compliance while farming out other aspects, such as anti-virus and anti-spam services.

Full hosting solutions mostly cater to SMBs, but a recent report from Radicati Group, entitled “Hosted Email Market, 2004-2008,” found that hosted messaging is starting to become attractive for larger companies as well.

“[Enterprises] see that a lot of the hosting providers have been around for a while with very few horror stories,” says Radicati Group analyst Marcel Nienhuis.“They like that providers have started offering management consoles to give corporations more control and access so they can easily set up new users and add rules and filters if they want to.” Nienhaus sees larger enterprises testing the SaaS waters with deployments in new departments or departments with special needs, such as factory floors or geographically dispersed users.

Some of the larger pure-play SaaS messaging vendors include ASP-One, BlueStar Solutions, BlueTie, BT Infonet, Critical Path, Intermedia.Net, Mi8, NaviSite, USA.Net, and USi.

Most providers base their services on Microsoft Exchange or in some cases Lotus Notes, but BlueTie, for example, uses its own technology. Improved scalability, Web access, and security features built into Exchange 2003 have allowed other, smaller providers to proliferate. Most providers bundle anti-virus and anti-spam services and offer those as discrete services as well. More and more vendors are also offering content filtering and compliance management.

Click for larger view.

Dedicated e-mail security providers include FrontBridge, MessageLabs, Postini, and Symantec, which acquired Brightmail. To varying degrees, they all offer anti-virus, anti-spam, encryption, e-mail filtering, and compliance management. And then there’s FivePoints, a vendor that’s particularly focused on compliance for small and midsize financial companies.

With hosted messaging security, midsize and large companies “like the idea that most of the bad stuff is kept far away from their network,” Radicati’s Nienhuis says.

When choosing an outsourced messaging service, however, it’s important to analyze fees carefully -- particularly for extra services and storage -- and to evaluate the completeness and ease-of-use of the management tools offered. Also, if compliance is an issue, make sure the provider has appropriate expertise and has implemented the right storage and disaster recovery measures. -- L.E.

Integration

A recent IDC survey showed that more than half of SaaS subscribers use at least three kinds of applications delivered as SaaS offerings. That’s a tiny absolute number now, but as SaaS usage grows, more and more enterprises may very well demand hosted integration among the hosted services they use. Otherwise, SaaS customers will be left as points of integration, reintroducing the complexity they were trying to squeeze out of the datacenter in the first place.