There’s a lot of talk these days about “on-demand” applications and “Software-as-a-Service.” This new type of information technology solution means different things to different people, though. In some contexts it refers to Web-based e-mail and office suites like Gmail and Google Docs. In other contexts, as with RingCentral (News - Alert), it refers to a whole new way for business phone systems to be delivered.
TMCnet caught up with Praful Shah, vice president of strategy at RingCentral, to find out about the company’s virtual phone and fax system that’s delivered using the SaaS (News - Alert) model and is designed specifically for small to medium-sized businesses (SMBs).
TMCnet: How would you define 'software-as-a-service' (SaaS)?
PS: SaaS, also called cloud computing, refers to the delivery of software or a business application over the Internet just using a browser. In this case, cost, complexity and maintenance of the technology is handled by a service provider and the company pays monthly usage fees, similar to other utilities.
By eliminating the need to install and run the application on the customer's own computer, SaaS alleviates the customer's burden of software maintenance, ongoing operation, and support.
TMCnet: When did the term SaaS first appear on the scene?
PS: The concept of "software as a service" started to circulate prior to 1999 and was considered to be "gaining acceptance in the marketplace" around 2001.
TMCnet: What are some of the key advantages of SaaS?
PS: Cost is the biggest advantage and it is huge, since a single SaaS infrastructure can be shared by hundreds of thousands of businesses. Other advantages include instant access to the applications rather than the complexity and cost of deploying and maintaining new technologies.
TMCnet: How did RingCentral come to be founded using the "on-demand," SaaS model?
PS: The founder of RingCentral saw that one of the largest, under-served market for business class phone systems were the small businesses. The primary reason for that was that the upfront large capital cost and the long lead time to deploy the old premise based PBX (News - Alert) based solutions did not meet the needs of small business.
TMCnet: What services does RingCentral offer and how do they work?
PS: RingCentral's SaaS based solution provides the capability to instantly provision, configure and activate business class phone services. RingCentral offers a rich set of services including auto-receptionist, custom greetings, multiple extensions, find-me and follow-me applications. A business can just go to ringcentral.com and start using it instantly, starting at just $9.95/month. RingCentral today helps improve productivity for tens of thousands of businesses worldwide.
TMCnet: How would you summarize the growth of SaaS in general, and RingCentral's offerings in particular, during the past few years?
PS: IDC (News - Alert) expects the global SaaS market for business applications to be $14.5 billion by 2011. RingCentral’s growth has been doubling for the past couple of years.
TMCnet: To what extent are SaaS solutions advantageous more to small and medium-size businesses (SMBs) than to enterprises?
PS: Small and medium size businesses find SaaS more advantageous since they do not have the option of spending huge amounts to money to deploy solutions on their own. They also do not have the skill sets to manage these technologies.
TMCnet: What does industry research say about the SaaS model, its success so far, and its future prospects?
PS: SaaS business is growing rapidly and IDC expects it to continue growing at 30 percent CAGR (compounded annual growth rate).
TMCnet: To what extent has economic slowdown in the U.S. affected the SaaS industry?
PS: Indications are that it would help the SaaS industry as businesses get more cautious in making large upfront capital commitments for technology deployments.
TMCnet: What else should people know about SaaS and about RingCentral?
PS: RingCentral has created a news category of SaaS applications that is replacing the need for expensive on-premise PBX deployments for businesses. RingCentral’s solution is designed for the mobile and distributed world and the hosted solution provides rich functionality starting at $9.95/user. The best part is that anyone can go www.ringcentral.com and freely test it and see how it can meet their business phone service needs for service like auto-receptionist, custom greetings, multiple extensions, and fax-to-email.
Mae Kowalke is senior editor for TMCnet, covering VoIP, CRM, call center and wireless technologies. To read more of Mae’s articles, please visit her columnist page. She also blogs for TMCnet here.
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