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A tighter economy has been a recurring theme for the last few years, and the businesses that have successfully adapted to the new economic reality have come out leaner and better equipped to react quickly to new trends and opportunities. Regardless of a particular industry or market niche, these businesses have taken similar approaches to key processes, and chief among them is a trend towards outsourcing costly, IT heavy initiatives and operations.
Here’s the paradox- it doesn’t matter what product or services you sell, success in the 21st century marketplace is largely dependent on efficient and flexible IT solutions. The upshot of this is businesses have to make a choice- hire and train the personnel and acquire the hardware and bandwidth needed to deploy and manage all their IT needs in house, or outsource those needs to a quality application host. SMBs that don’t have money to burn smartly turn to outsourcing as the answer.
SaaS, or Software as a Service, takes an end user perspective on what software should accomplish and the best way to deliver on those requirements. To take a simplistic view- people don’t want to own word processing software, they want to create and edit documents. Purchasing and installing a word processing application (as well as the computer to run it on) are the steps needed to do that, and until recently that’s been the only option.
SaaS application hosting says that ownership isn’t the only option, and in most cases it’s not even a good option. Unless IT services are your core business function, you have highly trained personnel on staff, state of the art hardware and software that’s already purchased and licensed, ample network connectivity and a fully redundant datacenter to house everything, it’s virtually impossible to provide an acceptable level of those services without breaking the budget. Much more likely is the prospect of having an inferior IT deployment that decimates bottom line revenues, and which provides no competitive advantages.
When you outsource IT functions to a quality SaaS application hosting provider, you leverage significant economies of scale, and reap tremendous benefits as a result. It’s an easy list to fill out- eliminating CapEx for servers and related hardware, gaining 24/7/365 access to trained and certified engineers, and enjoying the performance and reliability of backbone connectivity and an environmentally secure, UPS backed datacenter just to name a few. SaaS application hosting also has a less obvious, but potentially more valuable benefit- an unprecedented level of control over IT costs.
The typical IT build/upgrade cycle looks like this- deploy more infrastructure than you need, grow into it, exceed capacity, repeat. It’s a model that’s been dictated by suppliers and accounting departments, not by business planners. It’s also terribly inefficient. At one end of the scale you are overpaying for your IT services, and at the other end you’re being poorly served. Both situations bleed away profits, and your business spends far too little time in the sweet spot of optimized price and service levels.
SaaS flips that scenario, allowing for true ‘pay as you go’ pricing, and ensuring that every dollar spent is contributing to the bottom line. Application deployments are truly scalable, and allow decision makers to get out of the cycle of overbuild and over utilize. If your business hasn’t already incorporated SaaS application hosting into your IT infrastructure, you are facing a serious and growing disadvantage. Take steps to fix that today, and learn how SaaS can boost profits and cut operating costs for your business.
Tags: application hosting, managed application hosting, SaaS, SaaS application hosting, Software as a Service
