A friend of mine named James Murfin sent me a fascinating article today.  You can check it out here.  In summary, the article says what SMBLive has been saying along:

• Telecoms providers are looking beyond traditional voice and data offerings and tapping into the growing (and lucrative) Software as a Service (SaaS) market

• The strategic shift is a good one according to analysts, including Erin TenWolde from IDC

• SMBs prefer to work with trusted advisors when making technology decisions.

• The SaaS market is flooded with young companies unfamiliar to SMBs, but those SMBs have long-established relationships with their telecom providers.

A few interesting quotes from analysts:

• "I do think when it comes to technology adoption, (SMB) companies will go towards trusted advisors and established relationships to help navigate those purchases," IDC's TenWolde said. "I think a lot of the telecom companies are looking at SaaS and SaaS-related opportunities."

• Jeff Kaplan, from ThinkStrategies said, " I think we're going to see more of this." Internet service providers and other telecoms are seeking ways to differentiate themselves by offering a "fuller suite of services that can enhance their position and better serve their customers".

Further, some analyst research pointing to strong demand for SaaS among SMBs:

• Mike West from Saugatuck Technologies published this Recent research showing robust growth in SaaS adoption by SMBs with adoption rising from 9% of SMBs in 2006 to 27% in 2007 with at least one SaaS application.

The bottmline is that (1) SMBs have a need for simple and affordable software, (2) SMBs will prefer to purchase SaaS from provides they know and trust, (3) telco carriers are highly motivated to capitalize on this trend.