SaaS: No recession here either

  Yesterday I wrote about how managed service providers are all but "recession proof," in the eyes of one MSP. Well, some software as a service (SaaS) vendors have a similar "bring it on" philosophy when it comes to economic downturns. Matt Smith, president of LiveOffice LLC in Torrance, Calif., boldly says, "Any type of recession is positive for us." While most dread reading the latest headlines filled with subprime sadness, credit carping and busted budgets, Smith is laughing all the way to the bank, while expecting to expand his company headcount by 35% in 2008.

How can he be so confident? Well, for one thing LiveOffice went through a dot-com bust and a recession earlier in the decade and business boomed. No reason it shouldn't do the same this time. And last quarter, which some say will be the first in an official recession, underscored the trend again. "We had a great Q4," Smith says. In poor economic climates, IT budgets get whacked and, in Smith's words, "the ROI of outsourcing makes it pretty compelling." Plus, he adds, LiveOffice is getting an extra boost from Microsoft.

Smith's company provides e-mail hosting and archiving services as well as auditing capabilities for compliance or litigation purposes. He says a lot of companies adopt LiveOffice when they confront an upgrade to Exchange 2007, which he says "requires all new hardware." Eschewing unplanned capital expenses for new gear will be another reason, Smith says, SaaS vendors should thrive in today's unsettled times.