Microsoft Corp. expects customers to adopt the new version of Office at the fastest pace in the software’s 20-year history, helping reverse a sales slump and fend off competition from Google Inc.’s Web-based programs.

The software has been tested by 7.5 million users, three times as many as any previous version, signaling that adoption will be quick, said Chris Capossela, a senior vice president in the Office group. Users are also likely to upgrade to the new package of business software at the same time they install Windows 7, released last year, he said.

"Proofpoint is off to an extremely strong start in 2010," said Gary Steele, CEO of Proofpoint. "Large enterprises and government organizations worldwide continue to look for ways to improve email security while reducing costs. At the same time, the global trend toward stricter, more complex data privacy regulations are driving interest in our data loss prevention, email encryption, compliance and eDiscovery solutions. As a result, we're seeing accelerated growth in our email archiving business and increased uptake of our DLP and email encryption solutions with both new and existing customers."

Year-on-year, business from Proofpoint's DLP and encryption solutions grew by more than 150%. Performance in highly regulated industries including financial services, healthcare and the government sector was particularly strong during the quarter. Notable trends from Q1 2010 included:

• Accelerating growth in SaaS email archiving: An increasing number of large global organizations adopted Proofpoint ARCHIVE to solve email storage management, legal discovery and regulatory compliance challenges. New customers included one of the world's largest pharmaceutical manufacturers (5000 mailboxes), a global energy services provider (29,000 mailboxes) and an international provider of postal and logistics services (30,000 mailboxes).

As the software-as-a-service business model and its pioneers have begun to mature, mergers and acquisitions of these companies are becoming more common, as evidenced by SuccessFactors Inc.'s $50 million purchase this week of collaboration company CubeTree Inc.

The few software-as-a-service companies that are large enough to pay for their smaller counterparts have historically not been very active acquirers, and enterprise software companies, with a few notable exceptions, have steered away from purchasing software-as-a-service companies because of the difficulty of integrating the two different business models.

But a handful of recent deals suggests that this trend is about to change, and investors are anticipating more - and better - deals in this sector than what they've seen in the past.

In December, Google touted a big win for Google’s cloud-based communication and collaboration suite, Google Apps: the City of Los Angeles planned to equip its 34,000 employees with Google Apps. This would replace Novell’s GroupWise system, the e-mail technology provider that LA had previously been using. LA had evaluated 14 e-mail technology providers for a revamp of the city government’s communication and collaboration platform, and ended up picking Google Apps. The deal was reported to be worth $7.2 million. But it hasn’t been a smooth transition for LA to move over from GroupWise to Google Apps; and it appears that the City administrators are questioning the move thanks to productivity, security and slowness issues with Google Apps.

6 reasons why potential customers should care about SaaS:

1. It is in the client’s interest for the vendor – their technology partner – to be around long term. On-premise solutions are not cost effective because they have so many technology stacks and versions of the software that need to be maintained and supported. With SaaS solutions, some of the savings are passed back to the client, and a significant portion of the revenues are reinvested into the infrastructure as well as in the development of new features.
2. SaaS vendors can focus on improving a single software version, used by every customer. Every engineer is dedicated to improving a single source of code. This allows the vendor to release new features and improvements much more quickly than is typically feasible with an on-premise solution.
3. Upgrading a SaaS solution usually happens ‘behind the scenes’. New SaaS software releases are tested extremely rigorously before being released. A quality problem would impact thousands of customers and hundreds of thousands of payees. On-premise solutions often transfer the quality ownership to the clients who must perform their own regression testing after an often labor intensive upgrade process.
4. Non-SaaS solutions are not always scalable. For example, with 10, 100 or even 1000 customers, an on-premise solution might work. But the real test will be when a solution is used by thousands of customers – will a non-SaaS solution really be able to scale up? “Probably not”
5. SaaS vendors constantly measure and monitor their environment. They make a significant investment into that infrastructure to ensure an optimal performance for all of their customers.
6. SaaS solutions are usually sold on a basis of $ per payee per month. Solutions all of a sudden become cost effective for even small companies which can avoid a high upfront infrastructure and license cost.

Still, Gartner found that most companies still do not have policies governing the evaluation and use of SaaS with only 39 percent of respondents indicating that such a policy or process exists, up just 1 percent from 38 percent in 2008.

The survey was conducted in December 2009 and January 2010 and involved 270 IT and business management professionals from a variety of industries in North America, Europe and Asia/Pacific who were personally involved in the implementation support, implementation, planning and/or budget decisions related to the purchase of enterprise application software.

"SaaS applications clearly are no longer seen as a new deployment model by our survey base, with almost half of those surveyed affirming use of SaaS applications in their business for more than three years," said Sharon Mertz, research director at Gartner. "The varying levels of maturity within the user base suggest growing opportunities for service providers along the adoption curve, as organizations seek assistance with initiatives ranging from process redesign to implementation to integration services."

LiveRoute SaaS solutions can help Middle East businesses save up to 70% cost, for using CRM & ERP System; Company announces partnership with US SaaS vendor Aplicor

LiveRoute, the Middle East’s first local company dedicated to providing Software as a Service (SaaS) to businesses in the region, today launched its operations.

Conformity Inc., provider of enterprise-class management platform for SaaS and cloud applications, has announced three new solutions to help organizations manage the rapid growth of SaaS and cloud adoption.

Also, Conformity announced several enhancements to its management platform that broaden its cloud application management capabilities while accelerating customer ROI. Conformity makes SaaS truly business ready by providing customers immediate visibility and control over their SaaS applications and users.

Glik's, an apparel retailer, has selected the Epicor Retail Software as a Service solution to provide its Midwest retail locations with software and hosting infrastructure and services to help drive improved efficiencies and processes throughout its retail operations.

Officials with Epicor said that the Retail SaaS solution, which delivers the company’s acclaimed and integrated store, merchandising, planning, audit & operations management and CRM modules, was selected by Glik's to support the ongoing expansion, which averages four to six new store openings each year.

Sterling Commerce is introducing software-as-a-service versions of Sterling Order Management and Sterling Multi-Channel Selling. This means that the Sterling Selling and Fulfillment Suite for managing the entire enquiry-to-cash process, is now available as SaaS.

Ken Ramoutar, vice president, product and industry marketing, said: “While Sterling Commerce has been offering cloud-based solutions for more than a decade, more and more customers are now seeing the business benefit of implementing a cloud computing strategy that helps them optimise capabilities while managing cost. Accordingly, we are expanding our offering to customers, giving them the broadest choice in how they define, deploy and extend our solutions to provide flexibility and the ability to quickly deliver ROI.”

A survey by Forrester Consulting, commissioned by Sterling Commerce, found that 68 per cent of firms used on-premises systems exclusively for supply chain and/or integration while fewer than half of firms said that deployment model made their top five selection criteria.