FRAMINGHAM, Ma. – Small- and medium-sized businesses aren’t excited about the concept of software-as-a-service, but they are excited about the benefits SaaS can bring to them. An IDC report predicts the top SMB trends in 2008, with SaaS expected to be one of the hottest technologies.

When IDC asked SMBs about this new way of delivering solutions, they said they weren’t excited about it, but when the questions turned to remote storage, they were very interested, said Raymond Boggs, vice president of SMB research at IDC. The high concept of SaaS as a theory isn’t interesting to SMBs, but the benefits they can get from using SaaS are definitely of interest. They like that somebody else is taking care of the technology so they don’t have to, he said.

“It’s very interesting because there’s real traction. Part of it is the very visible Salesforce.com and Netsweep, the CRM application, and what we’re counselling and what we anticipate is the benefits of software-as-a-service rather than the name itself will really get traction, especially for small businesses,” Boggs said.

The appeal of SaaS is they don’t have to make ongoing investments in on-premise equipment, as well as the fact that it’s hosted by someone else, he said. They don’t have to deal with it; they just get to make use of it.

“You’re handing off your headaches to someone else,” Boggs said.

Two other technology areas that are likely to grow this year are storage and security, both of which are also tied into the overall trend of SaaS.

“The nature of even things like e-mail archiving are changing pretty dramatically,” Boggs said. That’s driving a need for increased storage and security.

One set of technologies that is going to be popular with SMBs this year was a bit of a surprise. According to Boggs, there is strong interest in wireless and remote worker support. With small businesses tending to be centralized and controlled, Boggs said it at first seemed contrary to their natures, but it does make sense when the empowerment the technologies provide to employees and managers are taken into consideration.

The interest in wireless and remote worker support doesn’t mean there’s a growing number of remote workers or telecommuters, but that they’re providing existing workers with greater flexibility, he said.

“The owners and general managers are seeing that they themselves are no longer nine-to-five kinds of workers, and as part of that thinking, they’re looking to support other employees along those same kind of lines. Of course, the danger is anytime/everywhere becomes every time/everywhere,” Boggs said.

Overall, worldwide IT spending growth among SMBs is expected to be seven per cent in 2008, which is a slower rate than that of 2007, IDC found. Global SMB IT spending increases will be about two per cent higher than overall IT spending increases.

Perhaps even more important than the technologies is themselves is the changing sales channel. According to the IDC report, “Worldwide SMB 2008 Top 10 Predictions: Increasing Alignment of Technology, Distribution, and Customer,” one of the biggest trends of 2008 will be the increasing alignment, distribution and the customer.

“Part of it is folks are realizing that the best place to sell to a small or mid-sized company is where they want to buy rather than where you want to sell,” Boggs said.

What this means is products are moving into sales channels where they haven’t been traditionally found, such as Dell’s move to sell through Wal-Mart, he said.

The belief that SMBs are looking for that one throat to choke seems to be a bit of a myth, as Boggs said SMBs are likely to purchase products from multiple channels, including the traditional VAR/system integrator channel and the retail channel. Simply put, they want to be able to purchase everywhere, so vendors are trying to make their products available in more places.

While some types of products will continue to be only available through reseller channels (Wal-Mart or Best Buy aren’t likely to begin offering SANs, for instance), some products will move into the retail chains. SMBs are purchasing from a variety of different channels.

For instance, a small business may go to Dell’s online store or to CDW or even to a retailer like Best Buy when they need to purchase on computer to get a new employee up and running. That same small business is likely to call a trusted VAR for more complicated deployments and investments, such as wireless networks. In the realm of storage, it would depend on the scope and scale. A retailer is likely the desired choice for a USB storage key, but the VAR would be the preferred choice for a NAS or a SAN.

“It’s a function of complexity as to the application itself,” he said.

This will mean a change in where vendors make their products available.

“A growing number of technology providers will invest time, talent and money in the worldwide SMB market,” Boggs said. “Different regions offer different kinds of opportunities, but the concentrated focus on effective messaging, innovative products, and efficient distribution will be at the heart of vendor success across geographies.”

This column was written by Ken Talbot of ConnectIT

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