Going 100% Cloud and SaaS

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20 years ago a got my first computer. It was an Intel Pentium MMX 166Mhz. Very similar to the one on the picture. Today it looks funny, but back then it was a dream.

I remember that there were two software packages installed on my PC — Microsoft Windows and Microsoft Office. They both came on CD-Roms and you had to install them.

Not sure if I remember correctly but I think in 1996 neither of that software communicated with an remote server to authenticate licences. Both packages run entirely offline.

Now I use a Macbook Air. Of course it doesn’t have a floppy disk drive nor a CD-Rom. It feels more like a terminal that runs remote apps. Over the last five years I’ve been gradually making this “online” transition. Now it is complete. I have limited to a minimum the number of apps that are locally installed on my Mac. Most of them come as standard OSX apps. I’ve ditched Microsoft Office a long time ago in favour of Google Apps. Most of the apps that I use today are:

  1. Cloud based — don’t require me to install anything locally, and
  2. Sold in the SaaS model — meaning available either for free or at a very low monthly fee

I titled my post as I belive that we might be crossing the chasm with this trend. I’m definitely an early adopter, but I see more and more “outside tech” people change their behaviour. Their workflow is becoming Cloud and SaaS dependant. This might have huge implication for many software companies targeting specific verticals.

Jason Lemkin called it ERPs for Everything in his recent post describing Themes in SaaS in ’16.

I’ve been thinking about this for the past year. My investment thesis is built around this concept. Now I believe most verticals are ready to deliver on this promise. As you go industry by industry it all looks very familiar. People need software to run and automate most of their daily workflow.

Depending on the industry vertical, this ERP will take on many different forms. Maybe in retail it will be the POS application, such as Vend. In services it might take the form of a booking application, like Booksy. As Jason writes in his post:

In order to build these new fast growing SaaS companies, founders will need to look at these specific industries and ask — what is the main, most frequent activity. Building a solution around that “frequency of use” is a guaranteed success.

Going 100% Cloud and SaaS will be even more amplified by the proliferetion of mobile. One of the best experiences coming from Cloud and SaaS is the colaboration part. With all the resources available instantly anywhere on any device — work simply becomes more productive.

To some point we were until now limited by technology — what a web browser can handle. Looking at companies like Onshape or UXPin I think that there isn’t any industry left that will not be transformed by the cloud distribution and SaaS business model. The future is now.

Written by

I’m a Partner at Innovation Nest, a seed VC fund focused on B2B Software. Helping SaaS founders with growth strategies and tactics.

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