According to IDC, The harsh economic climate and worldwide recession are going to to accelerate the adoption of software as a service (SaaS)
Their press release says:
Recent IDC surveys and customer interviews support the finding that the harsh economic climate will actually accelerate the growth prospects for the software as a service (SaaS) model as vendors position offerings as right-sized, zero-CAPEX alternatives to on-premise applications. Buyers will opt for easy-to-use subscription services which meter current use, not future capacity, and vendors and partners will look for new products and recurring revenue streams. As such, IDC has increased its SaaS growth projection for 2009 from 36% growth to 42% growth over 2008.
To anyone that’s established in the industry, it’s probably not much of a surprise. Whilst everything around us apparently crumbles, we’re sitting here trying not to look too smug whilst we wave the new customers through the door.
The reasons are pretty obvious: Spend a few hundred pounds on some software that will need upgrading and have additional support costs, or just spend £15.99 a month.
In the current climate (anyone else getting sick of that phrase?), small businesses are looking closer at their costs, and no-brainers like this are the first to get dealt with.
It’s worth noting, I think, that it was in the previous economic downturn that SalesForce.com really got it’s footing.
The figures in the IDC report relate specifically to the US, not the UK.
In search of UK specific numbers I turned up Hosted-applications usage on the rise (March 2008) which says
Large enterprise adoption of software as a service has increased by a third over the last year, according to analysts at Forrester Research
and Developers Expect SaaS Boom (Jan 2009):
More than half of software developers worldwide expect to work on internet-hosted applications during 2009, confirming the success of software-as-a-service, according to a survey from Evans Data.
Both are interesting reads, but none give the hard facts I’d like to know about SaaS adoption in the UK. So we’re left with anecdotal evidence. If my Google Alerts are anything to go buy, it seems SaaS is getting bigger, quicker in the US than it is here.
I’ve heard on the grapevine that a lot of the newer SaaS vendors (especially the non-British ones) are having a hard time getting any traction here in the UK. Is it because they’re not yet up to speed in marketing to a foreign audience or is it that the reserved Brits are resistant to SaaS?
We’ve managed to do quite well over the past few years. The Software Satisfaction Awards Survey showed us with 70% of the vote for the web-based software category. Whether that means we have a 70% market share or not is debatable, but it certainly says we have a big chunk of the UK market.
I was discussing this with one of my colleagues last night over a bottle (or two) of the good stuff. We posed the following question: if we went in for a day as consultants to one of these firms that are struggling, what advice would we give them so that they could emulate the success we’ve had?
After much thought, I suggested “Be luckier”. A lot of what we’ve achieved, I think, is down to being in the right place at the right time with the right solution – pure good fortune.
Realising that our fledgling consultancy business wasn’t off to a very good start we opened another bottle and tried to think of something more useful to tell our imaginary clients. The only thing of any value that we could come up with was to not sell what you’re doing as Software-as-a-service.
Look at our homepage – the fact it’s web-based isn’t mentioned. It’s certainly not prominent. We sell on the fact that it’s incredibly easy to use. The fact that it’s web-based is incidental. The people using our software aren’t “early adopters”, or they at least wouldn’t see themselves that way. They just want a bit of kit that’s easy to use.
Small businesses in the UK aren’t embracing SaaS, as a concept, as quickly as their American cousins seem to be. If they did then I think it’d go a small way to getting us out of the “current climate” a bit quicker.