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In the ERP space, second-tier players such as Intacct and Lawson Software offer hosted versions of their own applications, whereas third-party service providers such as NaviSite and USi host ERP software solutions from the top-tier vendors.
Employease is a leader in the HR space, competing against Peopleclick and Ultimate Software. The latter concentrates on workforce acquisition.
Arena Solutions is a leader in PLM (product lifecycle management). Ketera specializes in e-procurement. And there’s a slew of vertical players as well, including Kintera for nonprofits and CaseCentral for law firms.
Hosted back-office applications are attractive for SMBs that lack the IT expertise to build and maintain complex in-house systems. But they are making inroads into large enterprises as well.
“We’re seeing a lot of hybrid deployments that use the SaaS model to get a new team up and running quickly or to fill in gaps in their in-house application. They look for easy integration with the in-house function,” says Amy Konary, director of software pricing, licensing, and delivery at IDC.
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
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.