Staples picks ASP route

Jay Baitler was tired of watching his sales force muddle through a hodgepodge of spreadsheets, databases and paper-based records. The senior vice-president at Staples Inc. knew he needed a software package to tie together the pieces and create a streamlined approach that would boost business.

He also knew his small but growing business unit wouldn’t rank high on the list when it came to upfront investments such as a costly sales force-automation application deployment.

“That meant we weren’t going to do any heroic multimillion-dollar software purchases,” says Baitler, who heads up the Framingham company’s contract business, which deals exclusively with corporate clients. “Necessity drove us to find a more cost-effective alternative.”

That alternative turned out to be an application service provider (ASP). Since 2001, Staples has used Salesnet’s hosted sales force-automation software to boost productivity. Staples started with 60 users on the Salesnet system, but the deployment has grown to more than 700 users.

With Salesnet, Baitler says he can better track his sales staff and quickly get rid of “bad apples.” Information that used to lag 45 days or more when transactions were handled on paper is now available in near real time, which ensures that sales opportunities are not lost, he says.

“Now I’m the quickest growing business unit within Staples,” Baitler says, attributing part of that success to the software. “There are other parts of the company that are, as a result of our relationship, using Salesnet now.”

Despite the hype-and-bust frenzy that shrouded ASPs for much of their early life, the market today quietly is chugging along with customers such as Staples that are finding that ASPs can help them reduce costs and eliminate headaches typically associated with in-house software deployments.

According to IDC, companies spent more than US$2.3 billion last year for software delivered as a service, up from $1.8 billion the year before. The research firm predicts that the market will reach $8 billion by 2007.