PUBLICATION: ITWEB
DATE: 15 MARCH 2010
By Samantha Perry, ITWeb features editor

For SMEs with limited IT budgets, little IT expertise and no access to outsourced expertise, software as a service (SaaS) and cloud computing mean good (and big) things. Technologies previously only available to enterprise-size organisations with enterprise-size IT departments or outsource agreements are finally within their grasp, at an SME-size price too.

Says Yossi Hasson, CEO of Synaq (an SME itself): “Cloud computing for routine, have-to-have business applications such as e-mail, messaging, collaboration and security, makes perfect sense – and cents – for the SME. This is particularly true for start-up organisations that generally can’t afford to devote an enormous chunk of their IT budget on basic infrastructure – servers and applications (between R150 000 and R200 000 to get up and running) – which add little competitive value to the business.”

E-mail has always been critical for SMEs, says Xepa Consulting’s Garth Francis.

“SMEs only now have proper choice,” says Integr8 IT joint-MD Rob Sussman. “We’ve had all the hype around SaaS and services in the cloud and procuring access on an on-demand, pay-per-use basis. The reality is that it is only of late that this has really been afforded to business. There have been challenges like the last mile, both from a cost and access perspective, and access to applications has been problematic because many weren’t hosted here, which meant they were expensive to access.
“Fortunately, a lot of that has changed. Prices have come down, connectivity is more and more cheaply available, applications have become available here, and a host of new applications have been built, developed and are now housed online. All of this adds up to SMEs having a choice, and the day-to-day and commoditised IT functions are being pushed out to the cloud.”

We have heard this all before though, as Jim Blayney, product director – service management at FrontRange, recalls: “The technology has finally caught up with the masses,” he says. “We’ve been down this road before with application service providers (ASPs); then the managed service provider market opened up. Now, from a technology perspective, we’ve gotten to the point of providing applications that the customer can really take ownership of without encumbering themselves with the infrastructure stuff. Nor do they need to have the money or wherewithal to afford or support the infrastructure.”

“With the maturation of the cloud computing environment, going it alone on the IT infrastructure and applications front makes as much sense as building one’s own little power station to provide essential electricity,” comments Hasson.

Says Guy Jelley, CEO of SaaS provider Post Vision Technology: “Just as the definition of cloud computing is still quite fuzzy, so is the understanding of SaaS, with users often being misled by offerings disguised to look like the real thing. Any true SaaS offering allows clients to ‘pay as you use’ with no contracts or fixed monthly fees. It should also be totally Web-based, can be deployed widely and allow room to grow with the business.”

SMEs only really have choices now, says Integr8 IT’s Rob Sussman.

From the SME’s side, he says: “They’re concerned about things like ownership of the data. As an SME you don’t have a big legal department and if someone steals your data, you have a problem. SMEs need to ensure upfront that they are protected.

Further, he says: “SaaS is pay-as-you-go. You don’t sign a 24-month contract. Many vendors are trying to get them to commit, though, because they’re smaller companies and perceived to be less stable than big corporates. Just because they’re small doesn’t mean they should be pushed around by a vendor. You don’t need to sign,” he emphasises.

Unsurprisingly, Jelley says the other major concern is bandwidth. “Companies want to know whether they will pay R5 000 to Telkom now because everyone’s using the connection?

“The biggest thing,” he warns, “is the costing model. You need to make sure you understand what you’re paying for. We see guys offering a service, then levying an additional cost for storage or bandwidth. This makes it very unpredictable. You need to look for a model that charges per transaction or per use and is predictable. If it is variable – like document storage – then you need to be able to monitor and track it. You don’t want to use it and then get a surprise bill at month-end for a couple of thousand for bandwidth.”

“The number-one thing to look for is whether they are local,” says Hasson. “Is the company local and the infrastructure local and locally accessible? Bandwidth is still a barrier, local is cheaper than international so costing is better, and speed and latency is better too.

All mine
We’ve gotten to the point of providing applications that the customer can really take ownership of.

“Secondly,” he asks, “what kind of standard base do they apply? Are they standards-based? Measure that by looking at how easy it is to move off the provider. Do they lock you in with contracts or data in proprietary format, or is it simple to migrate?

“Thirdly, support. Do they provide 24/7 support? What kind of redundancy do they have in their infrastructure? What type of SLA do they offer in terms of response times and guaranteed uptimes? Just because you are moving to the cloud and it’s more affordable, doesn’t mean a downgrade in experience. Cloud should give the benefit of price without detracting from service.

“Last, and more difficult to test,” he says, “is the security of the infrastructure. Here you can check out the reputation of a company, get references from other customers, and find out exactly how do they protect your data and information so you know it’s being housed securely and safely.”

Says Garth Francis, CEO of Xepa Consulting: “What’s been important in the SME market is e-mail. E-mail has always been outsourced where a company doesn’t have an Exchange server. This has limitations – you can’t access it anywhere anytime, you can’t share calendaring, etc. So the next step is having a local server in place or a hosted solution. We’ve been offering hosted Exchange for customers on the go all the time, or where they don’t have the server infra to support it. It’s better for them if they get a hosted solution with full collaboration features. On top of that, users ask about documents. There, the next step up is Google Apps. E-mail is accessible anytime, anywhere, as are Excel or Word docs. Users can collaborate on a specific document. Then you can add CRM to that – there are a number of online applications available. We came across Zoho CRM and use it free for a limited number of users. It’s worked well. We now use Zoho people for managing HR and staff needs around leave apps and travel expenses. It makes it easy for me as an SME.”

Says Tim Walter, Nashua Mobile’s GM, product and marketing: “The important thing for an SME is to move from a sometimes-on to always-on connectivity either via Neotel, Telkom, ADSL, WiMax or a microwave connection so they are always connected to services in the cloud, and then to invest in mobile and desktop equipment that will allow them to access these applications.

Dilemma
If someone steals your data, you have a problem.

“The other thing becoming quite interesting for SMEs is the app stores becoming available on smartphones – iPhone, BlackBerry, Android devices. There are a number of personal productivity apps, like a contact synchroniser to synchronise yours or an employee’s phone with the server. Your customer database may be on rep’s cellphone – if it’s stolen or the rep leaves, you lose that. It’s worthwhile to set up one of those databases so as soon as contact is updated, it will update to server automatically. The main advantage of these is you can play with them and see what suits and if needs be, purchase the full app online. It gives SMEs access to developers worldwide producing great apps for the mobile space.”

Research In Motion country manager Deon Liebenberg agrees. “As an SME owner you want to deploy something people can use that will drive efficiency. I think these things [mobiles] will become more compelling over the next year. There are 50 million SIM cards and 39 million users in South Africa. They all have SMS and all know how to use a phone. The transition to Internet and e-mail on a mobile phone has been happening the last few months. It’s going to explode. It’s natural evolution, and the next step will see companies giving people smartphones for mobile e-mail, mobile Internet, and mobile business applications. We’re seeing companies leapfrogging and developing apps [exclusively] for mobile. The advantage is cost – it’s more cost-effective to develop, deploy and manage.”

“Desktop virtualisation is defined as two things,” says Citrix country manager Nick Keene. “The first virtual desktop is a hosted desktop located in a data centre or in the cloud, hosted by a service provider providing the desktop as a service. The second is a virtualised desktop on the endpoint device, whether that be a laptop or PC the person has been issued with. The operating system is virtualised at the end point.”

The move to e-mail and Internet via smartphone is a natural one, says RIM’s Deon Liebenberg.
Should a company choose to go down that road, Keene says, the business needs to choose one of those “based on the requirements for the person to do their job. Do they need to be mobile? Do they need to work in a disconnected state? Are they travelling? If so, virtualisation at the end point is better, whereas for a typically office-bound worker or someone accessing the environment remotely, even teleworkers, then a hosted virtual desktop will be more effective. It allows the person to access the company’s infrastructure from any location, given a connection to the Internet.”

The cost implications for the client depend on whether they acquire and run the infrastructure themselves, which will include a server room, hardware, management, etc. The other option is to find a service provider offering a hosted solution.

Says Keene: “The service provider will be able to take the company’s software, apps and data and host it on a pay-per-use model. This is attractive because the provider takes the management and ownership away and gives access to the desktop and apps for a fee per month. The client can then scale up and down without incurring fixed costs. On the other hand, virtualisation at the end point is more cost-effective because companies can typically leverage existing PCs etc.”

The downside of a hosted solution, he notes, is that connectivity is typically a problem and access in disconnected environment is a concern.