Coghead, an early pioneer in the creation of a Web 2.0 application development platform, announced a deal on Thursday with British Telecom (BT) that will give Coghead developers access to BT's telephony services and, by extension, its 1 million customers.

Coghead also announced a low-cost package of SAAS (software as a service)-based applications dubbed Business Essentials for small business.

Business Essentials includes applications for asset tracking, project management, access to company directories, lead management, and PTO (paid time off) management and recruitment.

According to Laurie McCabe, vice president of SMB insights and solutions at AMI-Partners, Coghead is one of the first to tap into the need for very small businesses to automate their manual systems.

"The legacy stuff out there isn't going to do the job if you look at cost and ease of use for those packaged applications," said McCabe.

Even pricing for some of the early SAAS providers of services for SMBs is out of range for smaller businesses.

"You might be spending US$200 to US$300 a month once you add in all the add-on services at Salesforce.com," McCabe said.

Instead, Coghead is offering a flat rate of US$10 per user, per month for its entire suite of applications.

Asset Tracking will track electronic assets and provides a template for maintenance schedules. Basic Project Manager includes file sharing and resource management. Company Directory offers departmental data and reporting hierarchy. Lead Management tracks contacts, leads, and opportunities. PTO Tracker will allow employees to track monthly PTO. Recruiting Manager manages such features as resumes, open positions, and interview schedules. Finally, My Dashboard will give users a view of tasks and activities.

The Coghead applications represent the continued expansion both up and down the business food chain of Web-based services. For many small businesses, Web 2.0 applications are the only workable solution if they want to enter the digital age.

"There are 50 million businesses that don't have a server," said Paul McNamara, CEO at Coghead.

Coghead's deal with BT represents the interest that some of the largest enterprises are taking in the Web 2.0 architecture. It will give Coghead developers access to BT's telephony services, and it provides BT with the potential to offer a host of new services quickly and without a great deal of its own investment. For example, developers could embed BT's SMS capability into an application developed on the Coghead platform for CRM.

While the deal with BT covers the other side of the Atlantic, McCabe believes there will be similar deals on this side of the pond as well.

"The primary piece of infrastructure for Web 2.0 applications is the Internet connection. Telecom companies like BT own the infrastructure, and they want to be able to offer more services over it," said McNamara.

Business Essentials is available immediately. Pricing starts at US$49 per month for five users.