Accounting Software – Is the future Software as a Service (SAAS)?

I’ve had a number of discussions following my last posting regarding the future of accounting software. Will the market continue to have thousands of applications in use/on sale in 5 years time as it is the case today? What will break this position? One idea gaining ground is the use of ‘hosted’ solutions (trendy buzzword for this now is Software as a Service – SAAS). The mechanism for this is that you access the accounting software package via a web browser and store all your information on the supplier’s servers. The IT industry is talking up this model as the potential future for all software. Will it apply to accounting products?

Obviously users will need reliable web access to use the system – which is probably sort of available today. Users will also need to trust their supplier will keep their data securely and make sure their own servers/software is working day in day out. Leading SAAS vendors like Skype have experienced downtime – but so do servers in your own office. In terms of potential cost saving larger organisations are likely to still need lots of servers to run all the other software products so it may not save much money – although pricing models for SAAS can be different e.g. per user per month with no upfront financial commitment. For small/start up businesses you can now most if not all of the basic software via a hosted service so if you are starting from scratch this may be attractive.

With a hosted solution there is the benefit that anyone anywhere with web access can use the system – so staff can work from multiple offices or say from home

Practically SAAS can work. Emotionally accountants may be reluctant to lose control of their application/data, even if a hosted environment is actually more secure than a server in your office. I suspect it may be the emotional fear that holds back the deployment of this technology. Ironic perhaps that accountants – who are stereotyped as being low on emotion – may not choose accounting software products via the web for emotional reasons!

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