Avnet is introducing hosted Microsoft Exchange Services and within 30 days will introduce a hosted offline storage service, or "e-vaulting"—the first in a series of software-as-a-service offerings the IT distributor plans to roll out this year.

The moves mark Avnet's initial foray into the SAAS space, according to Charlie Babb, vice president of managed services for the Tempe, Ariz.-based distributor. The company already offers managed services, under the name OneTech, to its partners.

Avnet joins several vendors and distributors, including Microsoft, Dell and Ingram Micro, which have recently launched or plan to launch SAAS offerings in 2008.

Avnet chose Exchange as its inaugural SAAS offering because "everybody knows what e-mail is and how it works,” Babb said. The hosted Exchange service includes hosted mailboxes, secure mail delivery, compliance, filtering and oversight, message archiving, message availability, mobile device support, and anti-spam and anti-virus protection.

"Resellers understand what mailboxes are," Babb said. "That makes it a simple play to get into the SAAS business. Once resellers see the recurring revenue stream, they will be interested in other applications."

Avnet has already signed on with an as yet unnamed vendor to offer a hosted offline backup storage service, Babb said, and will formerly announce the offering within 30 days.

Other services on the way include CRM (customer relationship management) and a vertical line of business applications. Babb anticipates that Avnet will offer SAAS from major software vendors as well as smaller regional ISVs.

"These SAAS services show solution providers that there is life beyond selling hardware boxes at low margins," Babb said. "Of course the hardware sale would not go away, either.  And the more recurring revenue deals VARs add, the more it is like an insurance annuity policy. The number keeps growing and more of what they sell goes into their pocket as profit."