Software As A Service

Eliminating software and hardware headaches

Several years ago, hosted Internet services called ASPs (Application Service Providers) were a popular vehicle for companies to quickly obtain, on demand, scalable software at a monthly cost per user. The ASP hosted the software while customers connected through the Internet, paying a subscription price per user. For the customer, there was no cash outlay for hardware or software, no IT installation or maintenance headaches. Unfortunately, the majority of ASP customers were startup Internet companies, which failed in 2000-2002, drowning the ASPs in a sea of bad debt, eventually leading to closure or merger.

However, in the past couple of years, software-as-a-service has made a remarkable return. Simply look at the impact of Google and eBay. In addition, e-mail hosting systems, CRM software, EDI, human resource applications, and even enterprise software have embraced the “browser-based pay as you go” philosophy. For multiple reasons, companies now are looking for the value of software without the overhead associated with buying, installing and maintaining the asset. Decision criteria now is based on how quickly and efficiently can I get software tools to affect my business outcomes, not when can my IT department prioritize and install this new software.

The Gases and Welding Industry
Software-as-a-service has a strong relevance to our industry. Let’s examine “fee for service” opportunities.

E-mail Hosting Applications — With the onslaught of Spam and e-mail security issues, corporate IT personnel began to look at packaged solutions that automatically updated anti-virus protection and Spam filters, while protecting IT systems from deadly attacks. It simply made sense to outsource this function to a third party that specialized in e-mail security. In-house talent seldom had the degree of specialization, much less the time, to build and monitor a fully secured e-mail system. Other benefits of an Internet-based e-mail system include allowing remote employees to access their e-mail via Outlook without use of a VPN or technical knowledge.

EDI Services — Are you using an old EDI translator package on an old PC? You can’t move it because the PC contains all of the data files and trading partner settings? Go with an Internet-based EDI system from ADX ( ADX will host the software and hardware and keep your mapping up to date. Anyone in your organization can access the software from any location via the Internet.

CRM Software — One of today’s most successful software-as-a-service products is from, specializing in customer relations management (CRM) software. Based on just a browser connection and a reasonable monthly fee, clients can customize their lead generation, follow-up, customer conversion and telemarketing efforts so remote salespeople and branches can view the same real-time data. Contrast this to a lengthy and expensive on-site CRM installation.

In addition to the above solutions, there are many other available software-as-a-service applications. For a list, go to

So What Are the Risks?
The largest risk in any software-as-a-service venture is the loss of Internet service. Companies will have to judge the probability of lost service to the risk of a software outage. Another important risk is data security. This is your data residing on someone else’s server. How secure is it? Lastly, what happens if the vendor goes out of business? Even if you can retrieve your data, who will manage it going forward? As with any outsourcing arrangements, due diligence of the vendor’s past track record, financial strength, and the terms and conditions of the contract are critical to a successful partnership.

Given the risks, distributors should explore these pay-as-you-go software services when the need is specialized or the software requires constant updating. This will allow more time for the firm’s IT staff to focus on core business issues.

Scott Ehrnschwender Meet the Author
GAWDA Technology Consultant Scott Ehrnschwender is president of Efficiency Associates Inc. in Terrace Park, Ohio. Members can reach him at 513-831-0181 and at