On-demand Software

So which technologies get funded rain or shine? Those that can save companies money or reduce expenses. Here are the five technologies must continue to invest in despite the recession.

As Google takes steps to sell its Google Apps software to companies around the world, analysts say the internet giant must change business users' expectations of technological change, speed and development.

In a down economy with slashed IT budgets, when there's no tolerance for 18-month software implementations and the price tags of on-premise software are not falling, SaaS and cloud computing offerings are very attractive indeed.

Todd Fitzwater, Principal of Demand Solutions Group, saw the handwriting on the wall when he started the company in 2005. Although Demand Solutions describes itself as an "on-demand" business solutions provider, Todd wasn't always a SaaS evangelist, and spent years prior running a successful, but traditional, CRM consultancy. His strategy is now being emulated by VARs wanting to achieve the same level of success.

We won't be re-playing "Death of a Salesman" to the tune of SaaS any time soon, but traditional VARs that refuse to accept the SaaS model are in for a hard time. This is a game-changer, and will alter the very nature of what it means to be a reseller. The "sweet spot" for VARs will be the small and midsize business market, although if it is marketed right, there could even be growth potential in the Small Office/Home Office market—especially with standard productivity applications from Google and Microsoft hitting the SaaS world.

Four companies who have done their SaaS homework weigh in on the pros and cons, successes and shortcomings, as well as some less obvious issues.

Why is SaaS only popular in small business?

While Software as a Service (SaaS) has been gaining popularity recently, it is remarkably noticeable that its popularity is limited to small and medium-size businesses (SMBs). Larger enterprises are still reluctant to embrace hosted application for their IT needs.

Makers of online software say Google's Chrome Web browser will likely work well with their products. They are confident many of their customers will adopt Chrome as Google adds more features in the coming months.

With capability and frugality firmly in mind, we rounded up 25 of our favorite software tools and Web services that we deem the best for powering small and medium-size businesses. Of course, not every business needs every type of program or service, but if your small business could use some help in any of the categories below, our list will give you a pretty good shot at picking a winner.

You may avoid putting your data into Amazon.com Inc.'s S3 cloud-based storage repository. You may eschew its EC2 on-demand compute services. But if your supply chain partners or IT services suppliers utterly depend on SaaS for their operations, you do, too.

Jonathan Snyder's five-person team at Dreambuilder Investments LLC isn't your typical IT organization. Or is it? The New York-based company, which buys and sells defaulted residential mortgages, uses Salesforce.com Inc.'s Force.com as its financial services platform. It backs up data using EMC Corp.'s hosted MozyPro service. Dreambuilder's server is hosted by RackForce Networks Inc. in Canada, and its e-mail is handled by Apptix Inc., a hosted exchange in Herndon, Va.