Software as a Service: Two Options Worth Noting

For many managed service providers, hosted email represents a first foray into software as a service (SaaS). But email is a commodity these days -- a nice, basic offering that pays decent dividends but won't make you rich. If you're looking for growing SaaS opportunities, it might be time to embrace hosted CRM (customer relationship management) or business intelligence. Here's why.

There are some major CRM and ERP (enterprise resource planning) players in the SaaS market, including and NetSuite. Both organizations work with VARs, but there are even smaller niches ready for you to exploit.

For instance: In recent months, our team has blogged extensively about the growing popularity of SugarCRM -- an open source CRM platform. Many people don't realize that dozens of VARs now offer SugarCRM as a hosted service. And for good reason: Many small and mid-size businesses don't want to maintain their own servers, yet they crave the power of CRM.

Sure, is a natural first stop for those customers. But the open source model -- where VARs and customers can easily add value to the platform -- has caught customers' attention. And that's not all. integrates with open source business intelligence tools, like JasperSoft.

If you don't want to leap into the open source pool, you can stick with traditional "closed source" commercial applications for SaaS offerings. Daptiv, for instance, is a solutions provider that specializes in collaborative business software. The Seattle, Wash.-based company offers Cognos's business intelligence software as a hosted service to its customers. I think IBM's $5 billion buyout of Cognos will give Daptiv customers further confidence that Cognos's platform has long-term viability amid the consolidating BI market.

If you do offer CRM or BI as a service, be sure to study Microsoft's every move. Despite the software giant's commitment to the channel, Microsoft has two SaaS initiatives (Live and Online) that deserve your attention. Pay particularly close attention to item 1 on our list of 10 Things You Need to Know About Microsoft and Managed Services.

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