Small Business Software Trends for 2012

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Are you confused by the terms SaaS and cloud computing? In their simplest forms, software as a service (SaaS) is the application, and the cloud is the place where you store the data from that app (and in most cases the application itself). Many of the latest technology announcements have implications for SaaS and cloud development that will serve small businesses everywhere.

tablet cloud

Note:  This is not a “predictions” post. I’m simply sharing what I’m seeing in the software marketplace.

  • Pricing: Most readers of Small Business Trends know that it is my pet peeve to visit a software site and not find transparent pricing details. The market seems to have echoed this sentiment (unrelated to my little rants) and I see more companies making it easy for customers and prospects to uncover pricing. Susan Payton recently did a piece on how we are afraid to talk pricing because we think we need to talk about and prove value first.  
  • Two new categories of mission critical applications: Business intelligence and scheduling. Social data continues to mushroom, leading small business owners to need better business intelligence (BI) tools. One of my favorites is Tableau Software, which has a paid desktop version (yes, I know that isn’t SaaS) and a public version for bloggers. Tableau allows you to visualize your data in powerful ways. Of course, many of us are still using spreadsheets to mine data into intelligence. It is possible, but a lot more work. Zoho Reports is another small business BI tool I recommend; so is Bime Analytics, which has an affordable small business offering.

Scheduling staff and workers is increasingly important to business owners, but so is letting customers set appointments based on openings in your schedule. Back in 2009, I wrote about Shiftboard for staff scheduling. For appointment setting, I would suggest Tungle or BookFresh.  Large companies may care about being able to access software from anywhere more than the smaller company, but given that small business is the lifeblood of the economy, remote access to applications is rapidly becoming mission-critical.

  • Cloud security gets talked about fairly often, and may be a concern for small business owners. I’m not sure it is any more of a risk to be in the cloud or accessing apps from a SaaS provider than to be on your own local desktop connected to the Internet. Life is risky. There are plenty of tools to mitigate this risk, whether in the cloud or anchored to your desktop.
  • Online storage and backup as a category appears to be like coffee in the morning: Everyone has it. You can find it cheaply just about anywhere and if you want a special gourmet flavor, a premium level provider can serve it up.
  • Ease of use improves daily or often. SaaS, like traditional software, gets easier to use each day and the best part is that as the development team makes a change, you benefit. There are downsides to SaaS, but for the most part, the benefit of “always upgraded” holds true. The feedback loop on SaaS development is near instant, so the development teams have learned to create a user experience that was not possible in traditional development cycles.
  • More hardware tools.  If you take a mobile device and create a useful gadget like a credit card reader, you can make the small business owner’s life a lot easier and win new customers. Witness the growth of SquareUp, which makes the Square credit/debit card reader. Elegant, small, simple and no monthly fee. Without easy and fast SaaS development and broadband access, these tools would not be possible. If you are looking for a payment processing device, also look at Intuit’s GoPayment or NetSecure’s Kudos Payment. The music industry is another great example of mobile apps and hardware; check out the Tascam iM2 recording device.
  • Mobile SaaS is growing. This is slightly redundant, but my view of mobile app development rests on a software-as-a-service philosophy. Some may argue that the mobile app is not necessarily in the cloud nor SaaS, but many are or will be.
  • Tablets are creating cloud comfort. In a Starbucks the other day, I counted four iPad or tablet devices (they looked sort of iPad-ish) and only two regular laptops. I’ve noticed the same thing at every other mobile warrior spot I frequent. The people using the tablets are often remote workers, not just college students listening to music while they study and surf. The point is that the iPad has kicked off a whole new expectation of what a machine can and should do, and often the apps that are needed to run these devices are SaaS-based.
  • Collaboration is routinely getting bolted onto most SaaS offerings. Naturally, Customer Relationship Management (CRM) solutions were the first to offer this. But many other types of applications are thinking social, which is increasingly synonymous with collaboration today. Even if you’re not collaborating in a public social network (few are), teams form around a document or process and share.
  • HTML5 is shifting how we look at apps and software. Right now, the browser is central to how we use SaaS solutions, but as more users operate remotely and via mobile devices, there is solid evidence that the browser could go away, or at least become dramatically different from what we experience today. Again, this is not a prediction, but HTML5 makes it possible to add functionality to the browsing experience. If Adobe’s recent decision is any indication of the trend, they terminated their mobile Flash development work to migrate to HTML5. Apple and Steve Jobs have long refused to work with Adobe’s Flash. Dan Rowinski at ReadWriteWeb does the best job I’ve seen of explaining what HTML5 means and six trends around it.
  • Landline telephone use is declining. Companies like Twilio and Tropo that offer simple Web services APIs for telephony are enabling developers to build SaaS telephony products much more easily than before. For example, ZenDesk recently released an inbound phone support feature built on Twilio. Hat tip to Michael Kaiser-Nyman, CEO of Impact Dialing, which lets you send voice recordings from your browser.
  • Amazon’s Infrastructure as a Service will increase adoption of custom SaaS. Amazon is the master of figuring out efficiencies in technology and passing them on to customers. You can rent storage space, processing power and network servers to grow your business. If you don’t find a SaaS solution that fits your needs (hard to imagine, frankly), you could find developers fluent in infrastructures like Amazon or Rackspace.

All in all, SaaS is still on fire and growing fast. According to Forrester Research data, SaaS total revenues will reach $21.2 billion in 2011 and more than quadruple to $92.8 billion by 2016. This is 26 percent of the entire packaged software market. However, Forrester predicts SaaS will reach a saturation point in five years, and growth will slow between 2016 and 2020. Hat tip to CMS Wire for their summary of this report.

Tablet Cloud Photo via Shutterstock

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TJ McCue TJ McCue served as Technology/Product Review Editor for Small Business Trends for many years and now contributes on 3D technologies. He is currently traveling the USA on the 3DRV roadtrip and writes at the Refine Digital blog.

14 Reactions
  1. I agree that tablets are only going to become more prevalent. Even my Mom is getting a Kindle Fire for Christmas.

  2. When you can do most of your work, reading and social media from a pad why carry a lap top if the application does not require one. Pads will triple in usuage this year. I have a feeling there are many sitting under the Christmas tree and given as other Holiday gifts.

  3. Great article TJ. I am moving all my operations to cloud. For project management & collaboration I use . Check it out!

  4. There’s no doubt that software offerings are evolving. It’s important to invest in a solution that can be trusted since critical business decisions are made based on the data.

  5. TJ, I’ve seen the iPad as a huge catalyst for attention in the SMB market towards cloud based SaaS tools. This is an interesting sentence I pulled of the Huff Post:
    “iPad usage has grown from a mere 9 percent in 2010 to 34 percent in 2011, making it the fastest growing technology relevant to the small-business market. ”

    Zingcheckout is built on entirely web based HTML5 technology and is aimed at making the life’s of SMB owners smoother.

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