Reality Check | Ephraim Schwartz » How Verizon SaaS hosting helps feed the business Web

January 17, 2007 | Comments: (0)

How Verizon SaaS hosting helps feed the business Web

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The fact that Verizon Business Data Center Services, a division of Verizon Communications, announced a hosting contract with Now Solutions, a software as a service [SaaS] provider for human resources solutions, probably went unnoticed by most people.

But there is something bigger going on besides a simple customer win for Verizon Business. It is also a big win for the move to the so-called Business Web.

Obviously, more and more of the telecommunications network providers will be getting into the business of hosting SaaS solutions. It makes sense because they have global network and security experience plus more racks, blades and bandwidth than most companies will ever need.

The question is where is this heading?

We are seeing the beginnings of a new direction with Salesforce.com which is creating an ecosystem for SaaS providers on AppExchange and through the creation of mashups with other companies like Google.

These are the first signs that SaaS vendors are creating more holistic systems. Integrated might be another word for it, but integrated doesn't speak to the synergy of two applications leveraging each others capabilties so that the result is more than the sum of its parts, one plus one equals three.

It makes sense for the SaaS providers to band together to offer something packaged application providers would have a great deal of difficulty doing.

What SaaS providers want and what Verizon thinks it can help bootstrap, according to Chris Gesell, director of product marketing for IT Solutions at Verizon Business, is help in developing programs that can create the ecosystem.

It does not serve SaaS providers well for customers to think of SaaS solutions as separate silos. In other words it benefits all SaaS providers when the customer doesn't assume SaaS is good for their CRM soluton but won't work for say, logistics.

What Verizon is looking at down the road, says Gesell, is to create the infrastructure to allow that ecosystem to thrive.

Of course an ecosystem works to Verizon's benefit as well. By building the services and the support for a SaaS ecosystem Verizon hopes to attract more vendors to join the ecosystem hosted by them in their data center.

Ultimately, this will add to the momentum of SaaS and over time cement its place as a major competitor to traditional applications.

Posted by Ephraim Schwartz on January 17, 2007 02:14 PM

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