SQL Server Magazine

Business Applications
Another level of remotely hosted services consists of complex applications such as Oracle and Microsoft SQL Server and the enterprise-class applications that run on top of them, such as those from PeopleSoft, SAP, and Siebel, and especially customer relationship management (CRM) applications. End-to-end solutions are available that provide the hardware and software to run these applications, as well as the specialized expertise necessary to make them work, which is often the biggest stumbling block to the adoption of such complex technologies. Although the initial purchase price can be significant, the ongoing investment in the skills needed to get the most value from these applications eventually dwarfs the startup cost.

In this environment, the biggest advantage that hosted-application providers can give customers is the expertise necessary for the exceedingly complex applications involved. Businesses that use such services can realize cost reductions of as much as 50 percent compared with the cost of an in-house implementation. It makes far more sense to use a hosted service than it does to make the up-front investment in the infrastructure needed to support a pilot project or even to simply evaluate a technology.

A variety of hosted CRM applications is available for businesses. Major application vendors, such as IBM, offer hosted versions of very high-end database-based CRM products. The biggest impact on CRM has come from hosted providers such as salesforce.com, which offers CRM solutions appropriate for small businesses (fewer than five users) as well as businesses with thousands of users. CRM is an appropriate fit for the hosted-application business because a sales force needs to be able to access its data anywhere. A Web-hosted CRM application lets your sales staff access its information wherever an Internet connection is available. Although the same can be said of almost any hosted application, accessibility is a major business advantage for a CRM solution.

Deciding to use hosted enterprise-class applications requires extensive research. Although the low startup costs and the ongoing savings are significant, there are few, if any, standard decision models you can use to determine whether a hosted CRM or other enterprise-class application is a good choice for your business.

Client Applications
Hosted client applications make standard office automation tools, such as word processing and spreadsheets, available through a Web site. The most commonly hosted client application is Microsoft Office. In hosted client applications, you're effectively running a hosted Citrix or Windows Terminal Services environment. The client uses RDP or ICA to connect to the hosting server from his or her local computer. Because hosted client applications are accessible from any Internet-enabled location, they're useful for businesses that are geographically widespread. Hosted client applications let businesses ensure the same working environment for all users without having to worry about configuration, management, or user support.

However, hosted client applications require an Internet connection. Users who aren't connected can't do any work because they don't have a local application to use when they're offline. You also need to maintain sufficient network bandwidth to assure acceptable user response times in periods of peak use. The metric for determining the value of a remotely hosted client environment isn't as clear as it is for many other hosted applications. Google's free Web-based word processor, spreadsheet, and calendaring software is an example of a fully hosted end-user application environment.

Coming to a Decision
Making the decision to use hosted applications requires you to carefully evaluate the costs involved as well as the advantages and disadvantages for your business. Even the apparently simple choices need to be analyzed based on what your business plans to do with the service. For example, if basic email services are all that your business requires, the choice of hosting providers is broad, whereas the choice of vendor and the services available becomes more critical if you plan to build business-critical collaborative environments. You're likely to find that in most cases a combination of hosted services and internally supported applications is the proper mix for your environment.

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