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The software industry is changing at a blistering pace.
Competition and customer demand are rapidly increasing, pushing software firms
to offer the best solutions to stay ahead. Gartner’s recent survey on the SaaS
market shows that even now enterprise software firms are seeing the immense
benefits of a SaaS deployment. Enterprise software firms are no longer using
SaaS deployments to fill in where IT had been backlogged, or where renting
services are cheaper than implementing something behind the firewall. Now, they
are rolling out mainstream applications. In this industry, when Microsoft
speaks, everyone listens. This small take from a recent interview with Allison
Watson, corporate Vice President of Microsoft`s worldwide partner group, "The
industry will change” is very foretelling into the software giant’s plans for
the future.
Competition and customer demand are a couple of external issues
facing software vendors entering the market. Internal strains and challenges
such as more stringent Service Level Agreements (SLA), application development,
and delivery of the application pose an entirely different set of issues.
Staying ahead of the curve is rapidly going to be a focus of every software
firm, enterprise or start-up.
The one great equalizer in this battle of developers is Managed
Service Providers. Managed hosting provides numerous benefits, both external and
internal. Externally, the right Managed Service Provider can take your product
global instantly, while still producing an optimal user experience.
Anytime-anywhere access to data is critical to keep pace in today’s software
market. In an industry characterized by intense competition and extreme change,
there are many limitations which exist that become detrimental to a company’s
success. Managed Service Providers engineer infrastructure for reliability,
resiliency, and security, in some cases offering 100% network uptimes. In
maximizing a customer facing distribution channel’s uptime, revenues are able to
be met as well as properly forecasted.
Optimal user experience is a key focal point, as providing a
customer facing application can be a double-edged sword. With the advancements
in technology, anyone can develop a web portal, but customer satisfaction is
pivotal in this relationship, especially realizing the lifetime value of a
customer. People by nature are resistant to change, thus creating
interdependencies between the user and your product can pay a lifetime of
rewards, not to mention creating alternate revenue streams from long-term plans
of up-selling SaaS accounts into software licenses. Managed Service Providers
take congestion issues, technology failures, and skill limitations out of the
equation.
Time to market is the other external issue that a Managed Service
Provider remedies. Speed is the name of the game in getting a product to market
before the competition. As the general public becomes more tech savvy, new
competition can arise instantly. Typically, a managed services provider can
customize an enterprise class solution to fit your company’s needs. By
standardizing their platforms and obtaining licensing agreements from vendors, a
Managed Service Provider greatly reduces a SaaS application’s time to market,
consequently giving your organization a vital competitive advantage.
Facilitating a smooth and rapid route to market can only increase market share.
As the software industry makes large shifts in their distribution paradigm over
the next few years, market share is going to become an increasingly important
factor.
Internally, partnering with a Managed Service Provider can provide
software companies with a plethora of benefits. The capital expenditures to
provide and maintain everything the business requires to launch and sustain
itself from the application, developers, system administrators, to any
commercial software required to run the application, along with a full
infrastructure pose daunting barriers to overcome. A MSP will deliver those
harsh capital expenditures over a more tolerable operational cost structure
allowing software companies to reinvest their upfront capital into software
where it is more beneficial in the overall well being of the firm. As we saw in
2007, 2008 and beyond may have been a springboard for a large number of SaaS
companies going public to secure funding for future growth. NetSuite,
athenahealth, ConstantContact, and Salary.com all had huge IPOs in 2007, and
will give the overall industry momentum on the exchanges. Once public, the
bottom line is managed a lot tighter to satisfy investors, and by utilizing a
managed service provider’s cost effective and predictable cost structure,
budgeting and forecasting becomes a lot easier to manage.
Organizational
focus is the final way to excel in this highly competitive market. By focusing
internal manpower on applications, the overall end product is maximized. By
providing a premier back office IT experience, SaaS companies’ focus can remain
on the application versus the everyday IT tasks. A Managed Service Provider even
maximizes the capability of the organization by providing 24x7 expert support in
multiple functional areas. This level of support typically would be too
expensive to obtain and maintain. After all, achieving operational efficiency is
good for any organization.
About the author:
Gary
McAuliffe is the Vice President of Business Development and General Manager of
Hosted Solutions` Boston Data
Center Facility.
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