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 Telcos need to tread carefully into SaaS

Published 7/4/2008 5:35:00 AM - Asia Pacific

Telstra recently made an announcement about its platform called T-suite that will supply on-demand business applications to Australian businesses. The offering will enable ISVs to develop and host applications on Telstra’s platform and provide a potential base of captive customers whom Telstra serves.

Tata Communications made a similar announcement to offer on-demand managed security solutions in the region, starting with the Indian market.

The Tatas have tied up with different solution providers and will provide an integrated solution to end-customers. Tata Communications’ position is different and safer by any judgement. Instead of plunging into the service delivery of SaaS which comes with its own set of challenges and is not its core-competence, the Tata company has opted to play the role of an aggregator and be a channel in the SaaS eco-system.

These tentative steps are positive developments that will have huge implications in the take-off of SaaS in the regional market.  One of the challenges for deeper SaaS penetration in APAC is connectivity, especially in non-metro areas in India, China and ASEAN countries.  With telcos in the fray, SaaS providers have an ideal partner to overcome connectivity issues and telcos can leverage this opportunity to upsell broadband connection and new technologies to existing customers by luring them with on-demand business applications.

The participation of telcos is a welcome development as it has contributed to substantially expand the SaaS ecosystem. On the other hand if telcos falter it could lead to a serious set-back in their endeavor to move further into enterprise services, beyond providing connectivity. As an initial step, a safe position is to be a channel partner with SaaS vendors who already have delivery systems in place, instead of treading into a territory that is fraught with challenges.

By Balaka Baruah Aggarwal

Image courtesy jeremyfoo

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