Let's be honest, it's not very often that the business software industry gets exciting. Microsoft, SAP, Oracle, Sage and a few others basically owned the industry since the computer shrunk below the size of a wardrobe.
While the automation of company finances, sales, marketing and administrative operations are still not typically considered great dinner-table conversation, dramatic industry changes are afoot and something, most definitely, is in the air - or should I say 'the cloud'?
Leading industry journalists, bloggers, researchers and investors are all talking about how the Internet is changing the way businesses store and access their information and predicting a fundamental shift in the next 5 years towards web-based software services.
Why is the old software model broken? There are a number of contributing factors...
- The world is becoming a highly-connected place and the proliferation and commoditisation of computing devices require more and more local installations of software to support 'shrink wrap' applications. The web browser is becoming the ultimate thin client and is removing this need for multiple local software installations.
- Advances in web technologies are rapidly improving user experiences. Software users like speed and responsiveness because their time is precious. Until recently, local applications were streets ahead in this area. But with significant advances in browser and client scripting technologies, web experiences are improving.
- Rental beats purchase when it comes to cash flow. For most businesses, software is a necessary evil and an expensive one. Buying multiple software licences and servers and networking them all up (while retaining the services of IT engineers) is a large up front cost that makes the affordable monthly fee of a hosted software service extremely attractive.
- Upgrades are a thing of the past. Many windows users will be familiar with the Vista debacle and the desire to stay with XP to stave off significant costs, risks and hassle. The attraction of a constantly up-to-date product beats the perpetual round of upgrade installations any day.
- Multi-tenancy has other spin-off benefits. Having multiple businesses on one system enables suppliers to provide value-add services that installed software cannot provide. For instance, our system enables our users to promote their services to each other, cross-fertilising tenants and leveraging B2B network effects.
If you're reading this blog as one of our many thousands of subscribers to Business IT Online, I will be preaching to the converted. You will already have experienced the value and convenience of accessing your business info via any computer, anywhere.
The vast majority still use installed software and I don't see that changing tomorrow. But as with any shift in technology, it's the early adopters that provide the great insights as to where things are going and believe me, they aren't installing much software any more.
Microsoft can be relied upon to put up a good fight to preserve their cash cows in stormy conditions, but we've had just a few clouds on our homepage since 2006 and there's plenty of blue sky ahead too for online software.
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1 comments:
I totally agree with your observation that a vast majority of users continue to use on premises software and that this will not change overnight.
SaaS purists are trying to get organisations to rip out their entire infrastructure and relocate it in the cloud - regardless of how that organisation has adapted its business practices over decades to work with on premise solutions.
The key to SaaS uptake is to embrace-and-extend on premise solutions, offering a smooth path to SaaS from existing environments.
The key to this is the client, the most visible element of the system to the end user. The Web is a fantastic ubiquitous interface but even with Web 2.0 technologies it can't provide the richness of an on premise client.
At Mimecast we recognised this a long time ago, rather than trying to get the user to retrain and adapt their behaviour we offer a stepping stone to SaaS by allowing end users to continue to use clients they know while harnessing the efficiencies and scale of a SaaS solution.
Mimecast Services for Outlook, for instance, allows users to continue to receive email in Outlook even if their primary Exchange server is down. In a couple of months we will add the capability to all provide this for Address Book, Tasks and Calendar entries. This is MAPI integration - drag-and-drop, document management system, email rules all function as before. Mimecast Services for Outlook also allows the user to search potentially decades worth of archived emails from within the Outlook client itself.
The longer that SaaS vendors try and get everyone to turn everything they do on its head, the worst it is for vendors like ourselves who are SaaS realists.
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