Xythos have launched one of the first software as a service (SaaS) document management and collaboration services targeted at the small, medium enterprise market. Xythos On Demand, as its called, aims at trimming costs while facilitating good document housekeeping and easy collaboration. It sure ain't free like SharePoint, but then installing Microsoft's bundle of MOSSy fun isn't exactly a few clicks away either. Xythos On Demand is built on the same Xythos enterprise content services platform employed by Fortune 500 and federal government organizations and includes document services as well as enterprise-class security for user authentication, rights management, and data encryption.According to the company, the new offering provides collaboration features that simplify how users share information both within and between organizations, including document level access controls, document versioning, document history, content change notification via email, and simple email collaboration processes integration via the direct document hyper-linking.Much like other SaaS offerings, there are no license, upgrade or maintenance fees. Instead, Xythos offers two account types -- individual or organization -- and charges a monthly fee that starts at $4.95 per month for a single user. The price goes up according to the number of users and as you'd guess, with the amount of storage consumed. For example, a 10-user account would run you about US$ 39.95 a month and allot you 5GB storage and 10GB of monthly transfer bandwidth.Customers can increase storage and bandwidth quotas at any time.We cannot fault Xythos for moving in this direction, especially since they have their enterprise business grounding them. If you believe what leading analysts say, and in this case we do, SaaS is going to be a significant chunk of new business in the coming years. We and they tend to think that most companies moving this direction are doing wise things.To qualify this further though, Xythos On Demand positions itself against a few heavy weights with head-starts and though the SaaS move is probably a good one, there is no doubt an uphill battle ahead. The first speed bump down this path is going to be the free version of SharePoint -- known as Windows SharePoint Services (WSS). As Mr. Tony Byrne of analyst firm CMS Watch recently pointed out. Microsoft, with SharePoint, has rather ingeniously identified, targeted, and captured what we can call the "disposable collaboration spaces" opportunity.Xythos On Demand does not directly compete with this notional market. It does however directly compete with SharePoint and WSS in what we might call the less disposable document collaboration space.Now if we had to run out and hand pick our competitors, rest assured that SharePoint or WSS would not rest top 'o the list. The product is in a strong position already and the marketing efforts mounting behind the latest release are formidable.There are other significant forces with designs on SMB collaboration. These include Intel with their coming SuiteTwo amalgamation, O3Spaces with their open source challenge to SharePoint, Blogtronix with their updated Enterprise 2.0 collaboration offering, and other on-demand collaboration services such as BaseCamp are meeting with strong success. On top of this Adobe are shifting their Acrobat product toward online document management and collaboration.If ever a space was heating, this is it. So as we say, a stab at SaaS is no bad thing, especially in such a dynamic space. Additionally, Xythos' enterprise bloodlines will certainly help to assuage doubt for those on the conservative end of the spectrum. Nevertheless, there's a lot of ground to cover yet, and the challengers are sure to be fierce.See for YourselfXythos On Demand is live and real today. Its been out in beta and, as the company claims, tested by over 200 customers. The barrier to entry is low, with a quick to set-up, free, 30-day, 1 GB trial available to the world. Somewhat annoyingly, you must tap in your CC digits to complete the trial account initiation. If you've got authorization to do such things, give On Demand a quick spin around the block. If not, you can always kick your feet up for some minutes and indulge in a few tantalizing product webcasts.