The state of the cloud UK, Part II - A new world, bravery required
- Costs are spread monthly and you can typically cancel at any time.
- You're always on the latest, greatest version with a greatly reduced requirement for users to manage their own updates and data security locally.
- Accessibility; access to your accounts wherever you can access the internet, including on mobile devices
Beyond those core benefits, though, there's a much bigger shift at play here than healthy adoption of just a different way of purchasing, using and managing business software. Upon closer inspection we can see that it's a shift that's driving what is likely to be the fastest adoption curve of business software we've ever seen in forty-odd years of business technology.
Actually, it should be no surprise that cloud accounting adoption is ramping faster than any prior business software category - in today's virtually friction-free, web-connected world, new things are able to travel and grow much more quickly than in the 80's or 90's. Combine frictionless distribution with the biggest connected audience of users we've ever seen (in 1999 there were 220 million users on the internet globally, today that number exceeds 2.5 billion), and it's therefore clear to see cloud software adoption ramps are bound to be much steeper than we ever saw with desktop software.
But even the dynamics of internet era distribution and communication don't completely explain the ramp.
The final ingredient behind what's driving growth in adoption of cloud accounting among small businesses is that small businesses have been chronically underserved by PC era technology for decades, and for many small businesses today's cloud based software finally ticks an empty box.
The UK's Department for Business Innovation & Skills reports just over 5 million businesses in the UK, a sizeable majority of which are micro-businesses who never adopted desktop accounting software on account of cost or complexity, and in most cases both. Indeed, well worn industry anecdotes say at least 60% of all UK businesses don't use a recognisable system of record for accounting, unless you count Microsoft Excel as accounting software.
Combine this voluminous and aching market need with the dynamics of cloud distribution and project forward five or so years and I suspect we'll see something that we've never seen before in business tech...
- User communities gathering around individual accounting software products that will number in the millions (anecdotally the biggest Sage desktop product user communities numbered a couple of hundred thousand)
- All on the same version, therefore all getting the same new features and functions on the same day
- All risking service discontinuity on the same day, too!
I'll explore these in the next part...
PS. I'm giving a talk at Accountex in London on 15/16 of May, rather bombastically entitled Everything you know about technology is wrong where I'll touch on some of these issues.