Hosted software is hot stuff
It is no secret that large corporates have led the way in terms of outsourcing, including that of IT services. However, with the widespread proliferation of fast, reliable internet connections, smaller organisations are increasingly taking advantage of an ever-wider range of hosted applications. Hosted software is officially hot stuff.
There are many reasons for the trend. Running a traditional IT infrastructure for all but the smallest of businesses requires significant expertise and effort. For many small and medium-sized businesses, resources are far better focused on core activities contributing more directly to the bottom line.
A host of benefits
An oft-quoted strength of smaller businesses is their ability to react and change swiftly in response to changing market conditions and customer demands. That agility can be hampered by a complex and inflexible IT infrastructure.
The hosted applications model, with key applications accessed on demand and paid for as they are used, allows resources to be beefed up in growth areas and cut back where demand has abated. Similarly, as employees new employees join the company, they can easily be added to the system. As others move on they can be quickly, easily and securely removed.
A key financial benefit is the reduction in capital expenditure. Traditional software and the hardware needed to run it are expensive, and must be paid for en-bloc, on installation. In a hosted environment, there is no capital outlay at all. Server resources and application usage are paid for through a fixed monthly subscription charge. As well as simplifying budgeting, this makes for a much more favourable tax situation, with the monthly subscriptions being accounted for as revenue items, not capital expenditure.
On-going savings
There are on-going savings to be made, too. The application host is responsible for data protection, resource provisioning, patches, updates, user administration and server maintenance. That means the business can redeploy resource previously allocated to these tasks, improving return on investment and, often, employee morale.
Server hardware maintenance, daily backups, patches and updates are all handled by the application host. All infrastructure is sited in a secure data centre. The risk of malicious attack, damage from malware, or other data loss is dramatically reduced.
Smaller businesses keen to sign up
With so many benefits it is perhaps not surprising that increasingly small and medium-sized businesses are adopting hosted applications. According to recent research by Analysys, more than one third of them are already using hosted applications, and of those which are not, over one half plan to start doing so in the next twelve months. That represents a quite remarkable rate of take-up.
A key enabler for this rapid and accelerating rate of adoption is the fact that deploying a hosted applications strategy need not be an 'all or nothing' affair. The vast majority of businesses using hosted applications - even the largest ones - have done so in a staged fashion, targeting first those areas where the greatest benefits were to be realised. The ability to approach the technology in this way is extremely attractive to smaller businesses, as it enables them to test the hosted approach in one area, assessing the benefits it brings, before committing further areas.
What's available?
In the hosted applications vanguard were website hosting and email services. The market is becoming increasingly interesting, however, with the arrival on the scene of a range of high value-add applications, such as CRM, accounts, payroll and collaboration suites.
In 2007, Newbury-based hosted applications provider Perceptive Online added Microsoft's Dynamics hosted CRM solution and Ivici's hosted accounts solution to its portfolio of services. Perceptive's Managing Director Brian Parnham is upbeat: "We were confident that the new applications would be well received, as we had been seeing growing demand for collaboration and CRM tools from our existing customer base. We hadn't realised quite how much demand there was, though. In fact it was sufficient for us to need to invest heavily in extending our data centre."
Perceptive Online is currently delivering the Microsoft Dynamics CRM and Ivici hosted accounts solutions to a wide range of customers in several different sectors, including Opal (the commercial ISP arm of the Carphone Warehouse) Pliva Pharmaceuticals and RSR Fasteners.
To find out more, call us on 01635 234100 or email us at info@perceptive-online.com to request our white paper, and claim your special 'hot stuff' free gift to grow and eat - very, very carefully.
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March 2008