September 11th, 2007
Could other ISPs follow BT's free Web biz-app offering, thus challenging Salesforce, others?
A scan of the RSS feeds I monitor (by no means the end-all, be-all sub list) reveals that hardly anyone may have noticed or cared that the UK telecom company BT took not just a natural step in what is now becoming a tradition of ISPs and telcos offering free applications to their customers.
According to ZDNet UK’s David Meyer:
U.K. telecom company BT Group has added a set of business-management tools to its portfolio of free hosted applications for small businesses.
BT Business Builder incorporates bookkeeping, invoicing, sales, planning, payroll, human resources, and health and safety tools, together with a news-alert service covering new business legislation.
Although the basic service is free, a fee-based upgrade to the premium service adds a 24-hour legal helpline to the mix, along with more-advanced human resources, health and safety, and payroll functions.
“Our customers are looking for comprehensive support and that’s what we’re delivering,” Bill Murphy, managing director of BT Business, said Tuesday.
“By offering the basic service for free,” Murphy added, “we are helping small businesses get off on the right foot, and more-established ones to make their processes much more efficient.”
In an offering that’s looks like it’s one part Salesforce.com, another part SAP, and another part NetSuite, the move by BT raises two important questions. The first is whether or not the telco market is signaling to Web applications hosters like those listed above and Google that, in a world that’s warming up to software as a service, competition from the companies that already have own an intimate (read: billing) relationship with Internet users is going to be stiff.
The second question has to do with which business model might prevail as the world plunges itself deeper into the so-called version 2.0 of the Web. Is it the model where Internet users go direct to the developer-cum-hoster of the applications in question (the way many go to Google, Salesforce, and NetSuite?)? Or is it the “Zimbra model” where the developer licenses their SaaS solutions to ISPs and telcos who in turn host the software and provide it as a free or nominally fee’d but private labeled service to their existing customers.
Earlier this year for example, Zimbra cut a deal with American broadband provider Comcast that, when all is said and done, could result in as much as a three-fold increase in the number of Zimbra Collaboration Suite licensees. Proving that there’s more to its business model than meets the eye (in other words, going direct to its customers isn’t the only way to go), Google recently partnered with Capgemeni in a deal that essentially turns the consulting firm into a high-end reseller of the premium version of Google Apps to enterprises.
While it’s not clear whose software BT will be hosting in order to provide the new portfolio of services, the company was already hosting something it called BT Workspace. Using Microsoft’s SharePoint (also a competitor to Google Apps), Workspace is a collaboration tool that BT targets at its small business customers along with another service called BT Tradespace.
Perhaps the other question raised by providing services at the onramp (as opposed to along the highway) is to what extent this move by BT and similar moves like it by other ISPs may force Google to engage more deeply in the onramp (ISP) business.
