Recently at the Progress Software Partner Summit, it was stated that certain type of users wouldn’t buy SaaS. Interesting enough the type of person who was used as an example was the Foreman of a Machine Shop (Progress Partners include some of the most interesting vertical players.) I found this argument false for two reasons.

First of all was the assumption that less technical users wouldn’t be comfortable using a web based app instead of installing traditional software. (Not that shop foreman are necessarily less technical, but that was the assumption for this example.) I think the reason the web has become so widely adopted is it is a much easier form of technology consumption than traditional software, hence new users are far more comfortable with it. How many times have you seen someone who couldn’t do the basics on a computer except web surfing and e-mail. My father spends 4 hours a day on his computer playing fantasy sports, but didn’t know how to save a file in a traditional app. If anything, less intensive computer users will favor using the web over trying to install anything.

Secondly, even if today there are certain users who favor traditional installed software, that is not going to be the case for the next generation. The youth of today, who will be the business users of tomorrow, are going to look for everything on-line. Look at what has happened to Educational Software sales. Between 2000 and 2003 educational software sales fell in half. I’m sure those numbers have dropped even more in recent years. While my nine year old daughter had a drawer full of games, and my seven year old son had one or two, my 4 year old has never done anything but go on-line (I’ll do another post some day about the genius of Club Penguin.)

Regardless of the jobs this next generation goes in to, they are going to expect to consume technology the way they have their entire lives, through on-line applications. And considering that the first of the Net Generation of kids is just beginning to hit the job market, software companies that don’t deliver on-line will be in serious trouble.

Posted: June 25th, 2007 under SaaS - Software As A Service.
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