SaaS and the Shop Foreman

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.

EuroSaaS

Last month I went out to Europe and was dismayed at the state of the SaaS market out there. Seemed there was still a lot of confusion about the meaning of SaaS. I had heard of one "SaaS" event that included SAP, an Integrator, and a Hoster. It was actually an event on hosting SAP.

I was hoping that the market would have gotten past the point of confusing Hosted Applications and true Software as a Service. It seemed it would be another 6 - 12 months before we started seeing real traction.

It seems I was overly pessimistic. I just got back from SIIA's On-Demand Europe Conference. There were a number of EMEA based SaaS companies doing interesting stuff from companies like Wesupply doing supply chain management, Lecayla doing billing and metering, and Clarizen doing project management.

Even more exciting than the number of SaaS companies already based in Europe was the level of discussion. Instead of bemoaning how European Enterprise would not buy SaaS, the companies instead were excited about new ways to go to market, partner and bring in value. The level of discussion was on par with most US based SaaS conferences.

Needless to say, I know we are going to become much more agressive in selling and delivering in Europe. It will be great to see the market develop over the next few months.