RealTime IT News

Verio Jumps On SaaS Bandwagon

Verio this week launched what it's calling its Business Solutions suite, a fairly basic package of on-demand business applications geared for the small- and mid-sized business (SMB) crowd.

Microsoft Exchange 2007, McAfee Total Protection, SugarCRM Professional edition, Accrisoft's business management and productivity suite—which integrates with Intuit's QuickBooks Pro—and an online PC data backup service will now be available to Verio's more than 500,000 customers through a monthly subscription service.

Chief Operating Officer Dennis Boyle said the company had been discussing for more than a year the possibility of rolling out some type of offering rooted in the white-hot, software-as-a-service (SaaS)  model.

The success of on-demand pioneer Salesforce.com, which now boasts more than 900,000 subscribers, and the resounding validation of the SaaS model by industry heavyweight SAP helped convince Verio the time was right to get into the on-demand applications business.

"Several years ago, there was a lot of hype and talk about SaaS and how it would be the next revolution in the online arena," Boyle said in an interview with InternetNews.com. "I would say it's been more of an evolution. We've been keeping our eyes on it for a period of time and we're now seeing research and evidence of much higher adoption not only among SMBs but on the enterprise side of the market."

All the data suggests reality is living up to the hype.

Gartner in March reported worldwide SaaS sales soared to $6.3 billion in 2006 and now predicts the market will eclipse the $19 billion threshold by the end of 2011. IDC has similar expectations, pegging annual compound growth of roughly 32 percent for the next four years and total SaaS market of roughly $15 billion by 2011.

"Verio's expanded portfolio is a natural extension of its existing service capabilities and reflects the changing needs of its customers who are increasingly frustrated with the costs and complexities of traditional IT management and software applications," Jeff Kaplan, an analyst at THINKstrategies, wrote in an e-mail to InternetNews.com. "Although there has been a proliferation of standalone SaaS vendors and managed service providers, Verio is in the vanguard of hosting companies offering a combination of on-demand IT management and business application services."

Verio also intends to create something of a SaaS developer platform through its Virtual Private Server where independent software vendors (ISVs) and other businesses can host, integrate, deploy and sell their own applications.

"We consider this to be a services evolution," Boyle said. "While I will always believe in the importance of hosting and providing an online presence, that's now really just the table stakes. Hosting companies need to be more of a one-stop shop to provide customers of all sizes with other applications and services. We're in a good spot to provide those services."

Verio said it plans to add more specialized applications to its SaaS menu in the months and years ahead and will provide a unified management console and data integration application to make life easier for subscribers navigating throughout multiple on-demand applications.