Home-based business gain from SaaS: AMI-Partners

NEW YORK, USA: The number of home-based businesses (HBBs) in the U.S. using Software-as-a-service (SaaS) nearly doubled during 2008, growing 92 percent to 2.3 million HBBs, according to New York-based consultancy, Access Markets International (AMI) Partners, Inc.

On a gross spending basis, HBBs contributed 16 percent of the total SaaS expenditures by U.S. small and mid-market enterprises for the period. These findings were released following the completion of AMI’s survey of U.S. HBBs, which explores how U.S. HBBs are adopting a variety of SaaS applications, such as accounting/finance, contact management, data storage/back-up, and other applications sets.

“Today’s economic reality is driving businesses of all sizes to seek the most cost-effective and easy ways to use and manage IT solutions. This is especially true for HBBs that have bare-bones or no IT support. SaaS offerings fit the bill as HBBs look for solutions that are both appropriate to their needs and do not require significant upfront financial investment,” according to Sau Lam, a Senior Analyst with AMI-Partners. Ms. Lam added that “cost reduction is cited by HBBs in the U.S. as the number one driver for using SaaS followed by ease of installation and management.”

A variety of SaaS categories have gained traction in the U.S. Home-Based business market, demonstrating broad-based interest in hosted solutions as an alternative to on-premise software. Findings from AMI’s U.S. HBB study show momentum building around three key application segments:

Business Productivity Tools: SaaS applications for foundational productivity tools, such as accounting/finance and contact management, are garnering an ever-increasing fan base.

Collaborative Applications: The need to reduce travel time and expenses is driving demand for hosted Web conferencing, document sharing, and project management applications.

Data Management Solutions: The need to better organize and make effective use of data is stimulating interest in online data storage/backup and data analytic/mining services.

SaaS vendors seeking to zero in on near-term sales opportunities will find a receptive market among younger HBBs, particularly those that have been in existence <5 years. 30 percent of HBBs between 2-5 years old and 13 percent of HBBs <2 years old are more likely to adopt SaaS than their more mature peers. “This reflects a generational shift. Today’s home-based business entrepreneurs are tech-savvy, having been reared in the Internet age. They are willing to invest in new technologies, which will help drive the HBB SaaS market opportunity,” says Lam.