Canadian service provider Telus is teaming up with Jamcracker to offer U.S. service providers the ability to deliver key business applications as a service to their small to mid-sized business (SMB) customers. This approach, known as “software as a service,” delivers many of the commonly used business apps, including Microsoft Exchange, McAfee security and virtual private networking, as network-based services.

Telus’s Future Suite, as it is called, allows small businesses to use sophisticated applications without investing in both capital expense and IT expertise, while giving service providers a steady revenue stream beyond the basis data transport offering, said Brent Allison, vice president of marketing for Telus Partner Solutions, the wholesale arm of Telus.

“Service providers are looking for ways to differentiate their broadband services,” he said. “Small businesses are looking for ways to get these services without a major up-front investment.”

The applications being delivered include: Microsoft Exchange, BlackBerry and Motorola wireless email services, Microsoft SharePoint collaboration services, Webex Conferencing, McAfee Total Protection for Small Businesses, Arsenal Digital online data backup services, Kaseya remote desktop patch management, Positive Networks virtual private networks (VPN). St. Bernard iPrism URL, IM, and spam filtering.

Jamcracker, which began as an Applications Service Provider in the late 1990s but is now surviving as a partner to network operators, providing its Jamcracker Service Delivery Network to deliver the applications, will jointly sell and market the software applications with Telus Partner Solutions to U.S. service providers including Tier 2 and Tier 3 telephone companies, cable companies and ISPs.

“Microsoft Exchange is a great example of a service or solution that was not conducive to the lower end of SMB market,” said Steve Crawford, vice president of marketing for Jamcracker. “Microsoft has a small business server that it will sell. But of the hosted Exchange we have been reselling through various partners, 95% of sales are to SMBs that have been running on [Web-based email systems]. It’s not a matter of saying, ‘Get rid of your Exchange server and let us do it for you.’ They wouldn’t have considered doing Exchange on their own in the first place.”

Small businesses comprise 70% of the U.S. economy and 50% of its IT spending, Allison said. That represents a $350 billion market.

By selling a suite a services, broadband service providers can also get around the long sales cycles associated with selling application by application, he added. Businesses can mix and match the applications they want to use, and service providers can set up their own business portals to reinforce their own branding of the SaaS approach.

“There is a single point of billing and of customer support for the SMB,” he said. “Service providers benefit by reducing churn and improving revenue.”