greatsealConsider the cost involved with upgrading an email system for the company with a thousand mailboxes. Add up software, storage, servers, engineering and days [or weeks] of implementation, well, you’re staring down a bill close to $150K or more. On top of that add recurring maintenance, disaster recovery, and sys admin — you’re looking at almost doubling costs in the first year alone.

Then, you’re married to this system for 5 to 7 years. [Same goes for corporate productivity software like word processors, company portals, IM and so on.]

So cut the fat and save some cash. Take a peek at the SaaS offerings out there (Software as a Service). They’re pay-as-you-go hosted apps minus the surrounding sys admin needs. In other words — store, manage and serve your company’s software in ‘the cloud‘ with someone else’s equipment – and staff.

Contemplating SaaS, Rob Howard (CEO and Founder of Telligent — a leader in providing solutions for online communities) blogs:

“A couple folks have been pushing us to look at Google’s corporate email options. There seems to be a lot of benefit and it’s only $50/year. At $5,000/year it is much, much less than we spend right now and I really like the idea of freeing up our IT team and the servers.”

Telligent say they have 100+ on staff. But imagine the cost savings across a company of 1000.

Let’s do the math: On-site implementation of Microsoft Exchange at $150K, plus $50K/year sys admin, plus $25K in disaster recovery. Amortize that over -say- a 5-year life cycle and you face a bill for $85K/year. Compare that to $50K/year for 1000 hosted mailboxes and zero sys admin / procurement headaches.

With SaaS, we’re not talking about generic webmail accounts either — like Hotmail, AOL, or GMail. SaaS is more on the lines of a managed service through providers such as Google Apps, Microsoft Online Services and a jillion other reputable vendors who serve up not just email, but also the other business apps I mentioned earlier.

SaaS maturity with compliance and up-time is fairly solid as well — not too much in the way of news related to SaaS breaches and failures.

And, you know SaaS is cool when even MTV puts their company portal on a hosted Microsoft SharePoint solution. MTV using Microsoft? Who would’ve dreamt it. I want my MTV!