Recently I wrote an email to Ben Kepes, one of the editors on Cloud Ave – a blog dedicated to writing about the phenomenon of cloud computing.  He had mentioned on his blog posts he was interested in reviewing a few online accounting software applications and I thought I would just write him an email and see what becomes of it. 

What resulted from our interaction was my first guest post ever.  I wrote a post about what I really think about SaaS (software as a service) and where I think this industry is going.  Before entering into the blog world with my personal blog Manifestation Stories (which has been long neglected since I started working on Clarity Accounting), I never thought of myself as much of a writer.  Less than a year after I started blogging, I am now writing for other blogs. 

Here is a quote on what I think about SaaS:

It is unclear at this point if any SaaS player will ever reach significant market share in their target market. Probably not in the way Intuit (creator of Quickbooks) can capture 90% of the US market share in the small to medium sized accounting software space. Interestingly enough, even Quickbooks Online struggles to get the kind of market share in the SaaS business accounting space, reaching 100,000 users online in 2007. This is nowhere near the numbers they are used to in comparison to their offline distribution.

Consumers are increasingly looking for SaaS solutions that can precisely meet their needs. One great example is Freshbooks - an online invoicing software that began by addressing only the pain of invoicing. They have since attracted more than 500,000 users worldwide. While there have been some grumbles within their online forum for them to add additional features to become an accounting software, it seems like Freshbooks is sticking to their plan of being the best online invoicing software possible for the time being.

It really seems like the most successful SaaS players are the ones who take on one or two pains and address them extremely well. Companies who create SaaS solutions with more features do not seem to win over those who focus on just a few features.

I also offered my crystal ball rendition of the SaaS market:

I have seen this as an increasing trend in the SaaS market place. In fact, our online accounting software has been approached by many of our customers and SaaS vendors to consider “integrating” with other SaaS applications. We couldn’t agree more. It doesn’t serve us or our clients for us to be the “jack of all trades and master of none”. It would be a lot better if we can just focus on what we do best and let others focus on what they do best. At the end of the day, we all win when customers get the best of all worlds.

As I am writing this blog post, Dobes is in the process of finishing and releasing our first working API.  If anyone is interested in testing it out, please let us know!  We already had 2 requests yesterday alone for a working API.

I think only time will tell if my opinion about the SaaS market has any merit. I certainly hope I am right — that way, I can be viewed as an expert. :P 

Where do you think the SaaS market is going?  Any thoughts?

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Tags: accounting software, accounting software canada, business accounting software, Canadian Accounting Software, mac business software, online accounting, online accounting software, quickbooks alternative, small accounting software, small business accounting software

This entry was posted on Thursday, October 23rd, 2008 at 8:35 pm by May Chu and is filed under Business Insights. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.