A relevant trend?...maybe this is where 01 Communique should be directing their business efforts towards the future- the icloud for software! Not sure if this is relevant to our survival, but, this is the trend, so adapting may be necessary. This is not the complete article, didn't think it was necessary, but it is in the g&m.
Say goodbye to buying software.
A new generation of Canadian tech companies is proving you don’t need to be in Silicon Valley to reach “unicorn” status. Ottawa-based e-commerce software-maker Shopify blew past the magical $1-billion mark when it went public last year. Hootsuite, the Vancouver-based maker of social-media management applications, raised $60 million in 2014, boosting its valuation to 10 figures. FreshBooks and Lightspeed, based in Toronto and Montreal respectively, are expected to join the club soon, too. All these companies have one thing in common: They sell software on the cloud, otherwise known as software-as-a-service, or SaaS.
Unlike the old system of buying and installing applications on site—Microsoft Office, say, or Oracle’s CRM software—the SaaS model allows businesses to pay a comparatively small monthly fee to access those same apps over the Web. In other words, don’t buy—rent.
Salesforce pioneered the subscription model in the early 2000s. Now, after several rounds of alternating hype and skepticism, most of the world’s largest software makers have converted, too—Microsoft, Adobe, Intuit, SAP and Oracle—drawn by the promise of a reliable stream of revenue for years. According to Technology Business Research, the rush to integrate pay-as-you-go applications is expected to bump worldwide spending on enterprise software from $150 billion (U.S.) in 2015 to $201 billion (U.S.) in 2019, an increase of 34%. While small and mid-size businesses are driving the trend, close to 90% of larger enterprises in developed economies have already embraced the access-over-ownership philosophy across their organizations, from HR and sales to accounting and finance. “SaaS is now the default, and on-premise software the exception,” says Mark MacLeod, a venture capitalist and former CFO of FreshBooks, which makes accounting software for small businesses.
The appeal for customers is clear: cost. For big companies, SaaS not only saves money on up-front costs, but it also dramatically cuts IT expenses, since SaaS providers do all the software maintenance and updates the techies used to do. For smaller customers, the benefits are even more pronounced. Take Lightspeed, which makes point-of-sale software for restaurants and retailers. Its users pay between $76 and $222 a month for an application that might otherwise cost $20,000 to buy outright. Lightspeed focuses on smaller users because millions of potential customers are minted every year. The company’s 460 employees already serve 35,000 clients worldwide, all of them happy to pay less for bells and whistles that would otherwise be out of reach—a slick point-of-sale app, plus a back-end system for inventory and customer management that generates the kind of real-time reports and analytics that used to be available only to blue-chip customers.