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Ask Steve: What Technologies Sell in a Down Economy?

By Steve Hilton
May 01, 2009 - Article

Over the past several months people have been asking me about market share or penetration numbers for this-or-that technology. Being an analyst, I guess those types of questions come with the territory. Second, SMBs are asking how they can save money. This month Ask Steve will tackle both types of questions by presenting some of our rich, market data for technology solutions that make “dollars and sense” in a rough economy.

Q: What on-demand solutions are selling?

— Tom from Tampa, Fla.

A: Managed and hosted services seem to be getting a welcome second glance by SMBs in this recession. Not surprisingly, SMBs are shedding IT employees, cutting costs and limiting all capital dollar outlays. As such, some managed solutions make sense, but which ones?

According to Yankee Group data, medium businesses (100 to 499 employees) are more strongly involved in the evaluation process of software as a service (SaaS) right now. E-mail/messaging applications, security/disaster recovery and ERP solutions lead the pack (see graphic, “SMBs Evaluating Hosted Services”). Cost savings are the top issue for SMBs and hosted solutions can often do the trick.

Yankee Group recently completed a piece of research showing an 83 percent cost savings during the first year of cloud-based e-mail/messaging platforms over premises-based solutions. Medium-sized businesses would be foolish not to explore this option, given its two-month payback period and upfront investment of less than $6,000.

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