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Good thing ?
It will put a stop to people using laptops on aeroplanes and in underground tunnels !
When my software carries on working even when I lose my connection and then synchronises data and programs on reconnection, then its time has come.
Web based accountancy software
This article is less about cloud computing and more about having your head in the clouds. Microsoft Accounts failed because it was a dinosaur born in a modern age. It seemed to mimic Sage (at least a dinosaur from the computer Stone Age) with a nod towards Microsoft Office. It simply was too heavy to respond to the market at which it was aimed. Cloud computing won't really take off until we see reliable minimum internet speeds nearer 20mbps; good insured service from the software suppliers; guaranteed portability of data from one supplier to the other in the event of service failures and cost efficiencies that they can only dream about at present.
Microsoft failed because it missed the point - not because it was office based (in both senses of the word).
There is not a march to SAAS
No matter what anyone says, there is a gradual move to web-based or Software-as-a-Service (SaaS) accounting, and that’s set to change the industry.
Hugh this is a competely biased statement. It is simply not true that there is a move towards using Web based systems. There has been a flood of vendor entrants, simply because it is a whole lot easier to put up a server than it is to go out and grab 1% market share, but the numbers don't stack up. While the providors of web based systems are really cagey about their user bases it is a simple matter to check it out on Alexa. The traffic on all of them is abysmal.
The market leaders SAGE and INTUIT have 6 Million and 5 Million users each and are effectively static in the growth of their user bases. MYOB has 700 000 and TurboCASH has 100 000. Everyone else is reluctant to reveal their numbers, so you can assume that they are all smaller.
Microsoft's failure is an indication of a bigger picture. Noone has got into this market in the last 10 years. Effectively Inuit has a US monopoly and Sage has bought all competition outside the US. With the exception of a few niche country markets and the Open Source market (In which I play with TurboCASH), SME Accounting is a closed shop. The failure of one of the world biggest players must make it even more daunting for an new entrant.
The web based packages have seen their peak. The increasing bandwidth is now bringing on the age of the hybrid packages in which users can keep their data locally AND in the Cloud and synch between them. Their server is not a web server, but is a fully fledged Virtual PC placed in a Grid and universally accessible. The alliance between GoPC.net and TurboCASH brings the first true cloud app to the SME accounting market, but not even we see this as a replacement, but rather as a complement to the desktop offering.
-- "No one possesses the less because everyone possesses the whole of it. He who receives an idea from me receives it without lessening me, as he who lights his candle at mine receives light without darkening me" - Thomas Jefferson
Thanks for the responses
Hugh's view is one of two or three Cloud controversies taking place on the site this week.
Over in our new Cloud accounting discussion group, there's also a bit of argy-bargy going on around confusing Cloud terminology as well as the pros and cons.
Come and join us if you'd like to continue the arguments!
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John Stokdyk, Technology editor
This is what you get when...
...you invite vendors to pitch. It doesn't help the buyer trying to find objective material. It confuses the reader at best and misinforms at worst.
Why MS Accounting failed
MS Accounting failed for a few reasons.
1. It is incredibly hard to swap out the incumbents with the same generation of technology. With Windows installed software we've seen this all over the world. For example MYOB failed to make in roads in the UK and Sage has low market share in some of their other markets. This is because the barriers to changing accounting software are too high, and a if the products 'sort of do the same thing' there is no reason to change. That is a reason why SaaS is significant now as it potentially allows unencumbered new vendors to grab market share (though we all agree that is currently still a small number).
2. Microsoft's view of the world is that small businesses live in Outlook and so the accounting software should be there too. They got that wrong.
3. They didn't build the maintenance model which the desktop industry requires for ongoing investment. Without the maintenance revenue streams the assets of MS Accounting were likely unattractive to a purchaser.
4. They saw the move to the cloud and realized they were on the wrong horse with little chance of the business becoming a star.
The shift to the cloud has 'some' impact but more importantly was wrong product, wrong model, wrong time. They made the right decision to quit the business.
Rod
A rose by any other name....
Much of the disagreement with the post comes from some definitional issues - people equating "cloud" with "SaaS".
A couple of commenters mentioned, either directly or indirectly, hybrid approaches akin to the software + services approach Microsoft touts.. a school of thought would be relaxed enough to include this in the general cloud category or even (at a stretch) as SaaS (regardless of whether or not it passes Duane Jackson's "Touring Test" for SaaS)
It's early days and we're still experiencing a shake down - no one knows what this stuff will look like going forwards and what potential it will unlock for SMEs - maybe we're better off not to argue semantics and spend more time thinking about the bigger picture....