As a result, software as a service is becoming a more viable option for SMBs.

Microsoft Canada is rolling out its Business Productivity Online Suite (BPOS), part of Microsoft Online Services, which is a suite of messaging and collaboration solutions hosted by Microsoft. It’s now available for trial to Canadian businesses, with general availability slated for April 13. The idea is to give small businesses flexibility to decide which services to keep on premise and which to have hosted by Microsoft, so they can extend new capabilities without straining IT resources (since there’s no additional hardware to provision).

Although Canadian businesses understand technology is a key business driver, 41 per cent of survey respondents said their priority to upgrade or invest in new technology has shifted due to the economic downturn and 30 per cent are putting fewer resources into technology. Despite this, almost half of respondents said they’re still looking at new technology to help them strengthen their business.

And half of those willing to invest in technology are looking at software as a service to deliver that, said Bryan Rusche, senior product manager of unified communications and collaboration with Microsoft Canada
Co. So Microsoft is accelerating momentum in this area with a set of announcements around its platform in the cloud (which means software is hosted as a service by Microsoft).

Microsoft BPOS consists of Exchange Online, SharePoint Online and Office Live Meeting. Microsoft is also releasing Office Communications Online for instant messaging and presence and the Business Productivity Online Deskless Worker Suite for economical e-mail, calendaring and collaboration service for the occasional user.

No industry, customer segment or region is unaffected by changes happening right now in the economy, said Phil Sorgen, president of Microsoft Canada Co. But disruptive forces can create an opportunity for change. “In times of disruptive forces in the market, the best companies, large and small, were those who made smart investments so they could respond to changing market opportunities or exploit new opportunities.”

Microsoft’s software-plus-services strategy is designed to bring technology used by Fortune 100 companies down to smaller businesses with as few as five employees – to help an SMB look like a large business. It could also be used by businesses that have a requirement to collaborate with third parties.

“Technology spending is more concentrated on saving money,” said Warren Shiau, technology analyst and senior associate with the Strategic Counsel. “Areas where we do see strength are around efficiencies.” These areas include virtualization, reporting tools and collaboration or worker productivity tools. Cost pressures will also change how businesses look at software as a service.

SMBs don’t typically roll out new technology or upgrade older technology on regular cycles, so the challenge is simply getting technology to them. That’s where SaaS makes sense, said Shiau, because it delivers technology, along with efficiencies and opportunities for growth. “This is where we have an opportunity to deliver technology in a different way,” he said. One of the biggest barriers, however, is trust, and how much those businesses trust the provider of hosted solutions. “Add a trusted name and the proclivity to say yes jumps up.”

There’s more focus these days on investing to improve operational efficiencies and reduce risk, and also to maximize revenue from existing customers, said Darren Meister, associate professor of information systems with the Richard Ivey School of Business. With SMBs, typically one or two people make decisions about technology – they have to see a benefit that makes sense for their business with a level of risk they’re willing to take.

“Cloud makes sense in these economic conditions,” said Meister. Businesses are not likely to invest six figures for benefits they won’t see for at least a year down the line. “Online reduces time to money,” he said. “Costs are in sync with usage levels, and benefits accrue right away.” SMBs can also try hosted services and then grow them out, which reduces the risk factor.

Doing more with less is not a tagline, it’s a reality, said Andy Papadopoulos, president of Microsoft partner Legendcorp. But to be accepted, it must be low risk, implemented quickly, with immediate ROI. SaaS reduces costs but also fixes those costs, so they’re more predictable. “It’s easier to justify ROI based on regular payments with a monthly result or cost reduction,” he said. “That ROI factor is an easy conversation.”

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