Companies could buy into SaaS sooner than expected

Quick corporate pick up of collaboration services, like those from Google, will hinge on how quickly members of the digital generation can get their way.

A generation of employees that likes instant upgrades and real-time streaming will hasten the adoption of third-party collaboration services, despite the security concerns of today's IT managers.

Technologies like Google Apps Premier Edition, which feature collaborative tools and email, have appeared at a time when traditional IT shops are considering their own content management strategies. Many of those strategies may involve weighing upgrades to new versions of IBM Domino or Microsoft's SharePoint and Exchange Server 2007.

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During the past few years, the split has widened between baby boomers, who have varying comfort zones with technology, to those who grew up in a digital world and think email is old fashioned, said Guy Creese, a senior analyst at Burton Group, a Midvale, Utah-based consulting firm.

"When everything was on paper, we all had to do the same thing to get information," Creese said. "The coming generation wants a more responsive system and the instant upgrade you get with [software as a service]. That's hugely different than what you get with Microsoft and IBM."

Google needs to welcome the enterprise

On the other hand, Google's culture will have to evolve to become more enterprise friendly. For example, it will need more sophisticated technology for records management or electronic discovery, Creese said.

Google said a Premier edition email account cannot send out more than 500 email a day or else your account will be temporarily suspended. This is a leftover attitude from the company's experience in protecting consumers from spam.

"If you are in corporate communications and sending a newsletter to the whole company, you need a workaround, like creating a bunch of accounts," Creese said.

But for many Fortune 1,000-sized companies, access to a group sharing platform for, say, a three-month project, at Google's price of $50 per month per user is an attractive option. "It's an attention getter," Creese said. "But you really have to know what you are getting into."

With the February release of fee-based Google Apps joining other options that are part of the much hyped Web 2.0 scene, IT administrators will be pushed into accepting these sorts of collaborative applications for some users, which might not be such a bad thing.

After all, it's one way to provide basic services to employees who are underserved by existing enterprise software, said Tom Austin, an analyst at Gartner Inc., the Stamford, Conn.-based consulting firm.

Gartner foresees a growing number of tools like Google Apps

In a report released in January, Gartner predicted that externally provided email and collaboration services, such as Google Apps, will emerge as a significant part of the enterprise email market by 2010. The firm predicted that by then, at least 8% of email and calendaring users in firms with 500 or more users will rely on email services as their primary enterprise email service.

This growth won't come from enterprises of 100,000 employees dropping things like email and moving to Google, Austin said. Indeed, there have been many failed attempts to compete against Exchange and Office. "You don't just unseat something as entrenched as Office 12," he said.

There are still plenty of workers in companies today who have no email at all, such as factory workers or truck drivers.

"Why not work out a place for them to have a kiosk where they can send and receive email?" Austin said. "You can set them up with Google's standard edition and it's free. You will spend time on training and support, but it will help them to become computer-literate and give them Web access."

Lots of other employees need to collaborate with others -- and not necessarily people within the same company. People involved in design, creative and planning tasks require tools that help them collaborate across the whole Web.

"Our belief is that 43% of the projects that knowledge workers work on are with people outside of a company," Austin said.

More time with SaaS tools, less time with Office

For many, lightweight collaboration tools from companies like Google, 37signals LLC (Basecamp) or eProject Inc. can be set up quickly. Of course, the more that people spend time using these tools, the less time is spent using Office, which will make it harder for Microsoft to sell Office, Austin said.

Burton Group's Creese said corporations have moved beyond the general concerns they originally had about software as a service, or SaaS. Thanks to other applications, such as those offered by Salesforce.com, delivery is no longer a concern. But compliance with federal regulations is still a problem.

"From a messaging perspective, if [our employees] are communicating electronically, then we have an obligation to archive it," said Brian Erdelyi, the information security officer at Blackmont Capital Inc., a Toronto investment firm.

Blackmont Capital does subscribe to Norwalk, Conn.-based Fortiva Inc. for email archiving because it requires its data to be encrypted. "If [Google] encrypted its applications, it would make it more appealing."

Gartner's Austin said he hears a lot of emotional reactions from companies taking strong security postures. But companies are always allowing people to use their Internet access for personal use. "No one is enforcing that," he said. "They are actively blocking for access to porn and gambling. They know there is good stuff out there and the good outweighs the bad."

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