Economic crisis advances the case for SaaS

That's the contention of Jean Moncrieff, chief executive officer of Emerge Group, who points out that more than ever, company directors are compelled to look for cost-cutting opportunities in their organisations.

“Okay, so it's not the first time we've ever had a recession, but a number of factors are combining to make this one a real shot in the arm for SaaS,” says Moncrieff.

Among those factors is the maturity of the SaaS model and the availability of better connectivity. These are key elements lacking in early attempts to achieve remote software delivery. “The Application Service Providers of the early 2000s, for example, had a perfectly reasonable model in theory. In practice, it didn't really work as the billing and usage models were obscure while the bandwidth available at the time was not capable of supporting reasonable performance,” Moncrieff recalls.

On top of that, the market was simply not ready for an arcane method of buying its software. “It was just simpler, easier and not terribly harsh on the bottom line for CIOs to continue licensing their software on the tried and trusted standard basis,” he adds.

But times have changed and smart company owners are looking to maintain profitability by sharpening their focus on costs - and eliminating the unnecessary ones.

By way of comparison, Moncrieff points out the costs that are typical for a small to medium organisation using a CRM package. “There is little doubt that many an SME is looking for the support and value which CRM can add to their business. However, on traditional licensing models, our own company was spending between R6- and R12 000 a month on support, licensing and consulting.”

That may not be a massive amount of money, but in terms of operational expenditure, it adds up. Moreover, says Moncrieff, this expense is especially noteworthy when compared to what Emerge Group now pays for its CRM on a SaaS-basis: US$49.

“We're getting the same sort of functionality and value-add at a massive reduction in overhead. The money saved can go into developing the company or straight to the bottom line,” says Moncrieff. “In a time where newspapers are reporting a 47% increase in company failures, there is no question that the ability to buy essential software as a low-cost service is of particular relevance right now. SaaS provides the potential to radically cut operating costs, if applied across all applications in a business, and give a substantial boost to cashflow,” he stresses.

In addition, in-house IT overhead is reduced as patching, maintenance and updates are handled by the SaaS provider. “From what we've seen to date, the model works very well. Even with the small monthly payment, when additional functionality is requested, providers respond quickly as the changes add value not just to one company, but potentially many users. And delivered as a service, SaaS means you take as much - or as little as you need, when you need it,” Moncrieff concludes.