'SaaS' to be new mantra for enterprise productivity

Software-as-a-service (SaaS) which means delivery and remote access of software applications via web browser without paying licensing fee, is soon going to be the new buzzword on the IT arena, according to IDC.

To use this delivery model, companies need not buy the software but only require a browser with internet connection, paying for the software according to use.

Says Subrah Iyar, chairman and CEO of WebEx Communication, "As the cost of software products is going up, most companies that were till now offering their software through licence model are seriously considering SaaS today."

He said traditional software companies like IBM, SAP and Microsoft are already streamlining some of their strategies to adopt the SaaS model. Through this the customers can get on-demand delivery which, apart from other benefits, can dramatically lower costs.

WebEx Communication, a provider of web communications services, has been offering software on the SaaS model for the last seven years. The US-headquartered company on Tuesday announced the launching of 'weboffice', a new business collaboration service in India. "The new solution enables multiple parties to collaborate, manage tasks and securely share ongoing project information," said Iyar.

The IDC report states that worldwide spending on SaaS will continue to soar over the next five years at a compound annual growth rate of 21 per cent and will reach $10.7 billion in 2009. In 2004, this was $4.2 billion, an increase of 39 per cent over 2003.

Seventy-nine per cent of companies have either purchased or are currently reviewing SaaS offering.

IDC says that there is quite a mix of software that is either being evaluated or purchased via SaaS.

These include payroll, accounting, intrusion detection, web conferencing and development tools.

Iyar said this was a good omen for companies like WebEx and had attracted the interest of traditional software and services companies, telecommunications companies, end users and financial firms.

Kiran Dattar, managing director, WebEx Communication India Pvt. Ltd. said new web-based applications are intended to provide a competitive advantage by offering faster implementation, different business models and new features. "The most important benefit that these provide the customers is flexible consumption, as the price can be paid as you go."

He said WebEx Communications India had the largest market share of 69 per cent in web conferencing services market (Frost & Sullivan) with over 1,700 customers in the country.

Some of its key customers in India are Amex, ICICI Bank, GE Consumer Finance and Johnson & Johnson. WebEx' revenue last year was $308 million with a year-on-year growth of 25 per cent.