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Group collaboration software services preserve channel opportunities

More vendors are offering group collaboration Software as a Service, but there will still be a need for value-added work from enterprise content management solution providers and developers, experts say.

More vendors are getting into the group collaboration Software as a Service (SaaS) market, but this trend shouldn't hurt solution providers and developers who provide services on top of Microsoft SharePoint and competing products, according to experts.

Microsoft last month launched SharePoint Online, a hosted service that allows subscribers to store, manage and collaborate on documents. And Xythos Software, a San Francisco-based vendor, this week announced its own online service, Xythos On Demand. Most major players in the enterprise content management market offer group collaboration software, and Xythos said its service will help it compete against Microsoft, Xerox (maker of Docushare) and other leading vendors.

Online collaboration services are designed for small and medium-sized businesses (SMBs) who want the functionality of group collaboration software but can't afford full deployments. Some branch offices of larger businesses and organizations are also customers, said Jim Till, chief marketing officer for Xythos.

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"The need for these kinds of services is mushrooming," he said.

The services also benefit users who want to collaborate with consultants, clients and colleagues who aren't on their same corporate network. Configuring guest access to on-premise collaboration sites can be a challenge for IT staff, but working on a hosted online site eliminates that problem, said Melissa Webster, a program vice president for IDC in Framingham, Mass.

Despite the benefits of online collaboration services, Webster said there is no threat to the channel partners who sell, deploy and support traditional group collaboration software. Mike Ragusa, the vice president of channels and alliances for Quest Software Inc., a third-party SharePoint vendor in Aliso Viejo, Calif., agreed.

"There will more than likely be an on-site component, and you'll need partners' help," he said.

For large partners like Quest, the biggest opportunities in group collaboration software are customization and developing industry-specific applications to build on top of the software. Clients will still need those services, even if they're using a vendor-hosted solution, Ragusa said.

But the role of smaller partners is not as clear, and Till acknowledged that the channel's role in online collaboration services is "still maturing."

Xythos On Demand customers can register for a free 30-day trial and then sign up for the full service online. Xythos has added several new features to the service, including Ajax technology, which simplifies Web-based tasks like setting user access to documents; Wiki capabilities for users to discuss the shared projects they're working on; and RSS feeds to notify users when other users access or modify documents.

"It's really designed to be a self-service service," Till said, although Xythos is working on some initiatives with partners. Solutions providers could bundle Xythos On Demand with other services, for example, or help customers tie the service into business process applications like accounting software, he said.

"[Partners] recognize just reselling SaaS isn't going to make them a lot of money," he added.

Ragusa, however, said reselling SaaS or referring customers can also be profitable.

"All of those fees go right to the bottom line, as opposed to doing implementation work," which takes some initial investment before higher margins can be realized, he said.

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