Smart SaaS

SMB Financial Productivity Software

There is an increasing number of Software-as-a-Service (or SaaS) firms jumping into the smallest end of the Small and Medium-size Business (SMB) market, and they are offering a variety of office productivity solutions. This is the fastest growing segment of the economy according to the Bureau of Labor Statistics there are up to 21 million self-employed consultants and small firms in the US.

This has traditionally been the sweet spot in the market for companies like Microsoft. Although most customers are somewhat happy with their offerings, Microsoft offerings tend to be cumbersome, packed with way too many features, hard to use and upgrade.

A new set of SaaS providers has emerged with products designed specifically for the small business owner. These packages are all delivered through the Internet as a service, so no more visits to Best Buy were required. Many of these new software services are very low cost and some were even free, and because of this, the adoption of these products has been rapid.

This Sector Report is only covers the incumbent software provider and the promising new SaaS suppliers.

Office Productivity Suite Profiles

Microsoft

Microsoft Office $$

Word, Excel, Outlook, PowerPoint and many other productivity products.

Microsoft has owned the SMB office-based software market for at least the last ten years. Their suite is large and includes all the main office productivity software modules.

Microsoft Office has been delivered as shrink-wrapped software. Microsoft is now experimenting with delivering their products through the Cloud along with using their Azure operating system. Most alternative office solutions are SaaS-based.

There are millions of Microsoft Office customers.

Public company (NASDAQ: MSFT)

New Alternatives

Google

Google Documents Free and $

On-demand documents, spreadsheets, calendar, presentations, email and more.

Some applications are very similar to the depth of functionality you would find in the Microsoft Office suite of products. Other Google Apps offer very lightweight functionally and don’t appear to be very useful. All Google Apps are delivered through the Cloud as a subscription offering. Google provides for free usage for up to three users and then offer the applications for $50/user per month.

Approximately 10 million users and 1 million customer companies.

Estimated 3,000 companies are signing up for Google Apps per day.

Public company (NASDAQ: GOOG)

AdventNet

Zoho Productivity and Collaboration Free and $

On-demand documents, spreadsheets, calendar, presentations, email and more.

Most of the Zoho applications have similar functionality to Microsoft’s products and provide many other capabilities beyond their Office suite. The Zoho application suite has better functional depth than Google Documents. All products are delivered through a SaaS subscription model.

Estimate 1.2 million users/customers.

Private company based in California and India. 250 employees.

Yahoo!

Zimbra Collaboration Suite Free and $

Hosted documents, calendar and email.

Hosted, open source applications that are less functionally rich than Microsoft, Google or Zoho offerings. One concern with using Zimbra is that if Microsoft finally purchases Yahoo! they might shut Zimba down and force their users to use Microsoft Office.

Estimate hundreds of thousands of users/customers.

Public company (NASDAQ: YHOO)

Other players in the SMB Office software market include Sun Microsystems StarOffice, Apple’s iWork, and Corel’s WordPerfect suite. Small businesses have many choices when considering an Office productivity suite and many of the best options are for free.

Small businesses are actively looking for ways to save money and using any of the SaaS-based office productivity tools will very quickly pay dividends. For example the City of Washington D.C. decided to switch from using Microsoft Office and related software to Google Apps and is now saving nearly $3.5 million annually.

Given the current state of the economy, many individuals are now setting up their own businesses. Using these new subscription-based Office Productivity tools can not only be very affordable for start-up your businesses but also give the consultant or SMB many of the same capabilities they had at their larger firms.

The good news is that there is no shortage of SaaS-based Office products out there to choose from and this is just a top line summary of what is available. Many of these products are available at very attractive price points, including many who are free. Given the experience that the City of Washington D.C., using these solutions not only can save a lot of money but also make SMB’s more competitive in this tough economic environment.