SaaS for the SMB: When does it make sense to outsource?

August 29, 2011 by Tim Attwood
SaaS or “software as a service” is one facet of the new IT model that many vendors are saying is going to change the way that all small and medium-sized businesses do their work. SaaS allows SMBs to outsource applications to a non-local server, providing flexibility and a wealth of options that traditional software purchasing doesn`t allow. But while SaaS can provide a number of immediate benefits for SMBs, it isn`t for everyone, and shouldn`t be used just because of the hype. How can you know when outsourcing to a SaaS solution makes sense?

What You Can Get From Being SaaS-y

The first question you should ask about SaaS as a small or medium-sized business is exactly what your benefits will be for switching over to an outsourced option. Keeping IT local means you have all of your software on-hand, with techs who know your code ready to step in if there is a problem. With SaaS, that code moves to a non-local server, and you run the risk of a server outage or data loss. The risk isn`t high, but what can SaaS offer you to balance it out?

For starters, CRM. Customer relationship management is a priority for any SMB, and that means getting the word out about new products and discounts, and keeping customers and shareholders in the loop about what is happening in your company on the front lines and how they can benefit from it. Happy customers are loyal ones, after all. Solutions like SugarCRM, Salesforce and Microsoft Dynamics are all tailored to provide cloud-based performance for SMBs and allow you to easily manage large lists of customer contacts and get your word out as quickly as possible.

Of course, the options for SaaS don`t stop there. Accounting software like QuickBooksOnline and FreshBooks are now offering cloud-based book balancing options, with more vendors coming onto the scene on a regular basis. Survey applications, email, word processors – almost any software you currently use can be found in a cloud version, letting you make a simple transition.

What Does SaaS Really Offer?


Sure, you could move easily, but what does SaaS really get you? All of the functionality of the applications mentioned above can be found in local options, so what does porting them to an off-site server do?

First of all, it generally costs more and you may not get to own the piece of software you buy. Instead, most SaaS software will come with licensing fees that are paid month to month, and upfront these may come out as being more expensive than buying a piece of software outright.

So where`s the benefit for an SMB? In the details, of course. With SaaS services, things like updates, patches and newer versions are automatic, and don`t require a shutdown of a company`s local systems in order to be applied. New features are also added at no cost beyond the monthly fee, and for an SMB looking to cut IT costs or if you`d rather not have any IT staff at all, a SaaS option can be a great one – all of the technical magic is taken care of on the server end by the SaaS company for the application and the hosting company for the server you are using. Whether it`s VPS or cloud-based, a SaaS choice can mean less stress and less hassle for your business, which often justifies its higher initial price tag.

Extending the Benefit

If that were all SaaS offered, it might not be a great deal in the long-term, but the fact is that storing an application away from a local server allows companies to do what really makes inroads – collaborate. Microsoft has an entire Communications and Collaboration Systems (CCS) group that is dedicated to improving the function of applications like Hosted Exchange, Sharepoint and Office 365. Programs such as these allow companies to collaborate in real-time when used as SaaS options, and when combined with things like Web conferencing and project management, can extend the use of SaaS applications beyond simply being more efficient and having better tech support.

Making Sense of the SaaS Switch

Not every SMB is ready to move to a SaaS service, nor should they just because the option is there. If your company is looking for a way to streamline software updates and lower IT costs, however, new SaaS options can provide a level of functionality that goes beyond the desktop.

About the author

myhosting.com provides VPS Hosting aimed to help enhance productivity & maximize resources. With 12+ years of experience, myhosting.com offers a full suite of services from Shared Hosting to Exchange Email and services for SMBs and businesses of any size.

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