News & Announcements

Embrace SaaS On Your Own Terms
By Heather Clancy, From the April 16, 2007 issue of CRN


The smartest solution providers have never been ones to sit around waiting for vendors to define the rules of engagement for some new solution area. They've charged right in, made mistakes on their own terms with some particularly forgiving and forward-thinking customers, adjusted their ideas and forged on. Later, some vendors (the smart ones) have consulted them for strategy.

With all the angst over the channel's role in Software-as-a-Service, I can't help but believe that this will be the way in which new business models around representing software solutions will take shape. Why debate when you can do (although in my situation, debating is doing)?

A great example of the take-the-bull-by-the-horns approach is a new service introduced late last month by Zumasys, a successful 2006 Fast Growth 100 alumnus that hails from Lake Forest, Calif. I think of Zumasys first as a great mobile solution provider. Then, lo and behold, it flips the switch on a new hosted set of applications that it calls TheOnDemandOffice (found at TheODO.com, which Zumasys apparently claimed as a URL a full four years ago). Included in the service are a virtual Citrix desktop that provides access to Microsoft Office, Exchange and SharePoint, among other features, and that starts at $129 per user, per month. Zumasys charges a set-up fee and it also bills additional integration time, if necessary, by the hour.

When I spoke with Zumasys CEO Paul Giobbi about the offering, he said the service evolved out of some hosting work that his company started doing last spring for a couple of customers who were concerned with having secure access to their applications basically all the time. For him, providing SaaS offerings is a completely logical complement to his mobile sales pitch, which is highly vertical (agricultural concerns, construction firms and startups) and very focused on small businesses with 25 to 50 people. The service works over basically any client and it also works over 3G wireless connections, where Zumasys also has been a pioneer.

"There is a distinct correlation between mobility and what we're doing, which is essentially centralizing applications," he said. The fact that it now provides his company with $50,000 per month in recurring revenue is an added bonus. Here's another interesting twist: Under Microsoft's service provider license agreements, Zumasys only pays the vendor for the software that is actually in use, which definitely helps with cash flow. Giobbi's other investments have included monthly payments to his Internet service and hosting provider, Savvis, and an outlay of about $250,000 in server and storage architecture. I think it's safe to say based on the success of Salesforce.com and now, based on Zumasys' own offering, that there is a very serious link between mobility and SaaS. I think it's a link that more solution providers would be advised to explore before someone else writes the rules.