Spotted this great SaaS article on Computerworld i thought was worth a mention. It reinforces my view that the SaaS (Software As A Service) market in New Zealand is on a path to maturity with high projected growth over the coming years.
SaaS is definitely here to stay. However, there were some comments about the smaller profit in the SMB SaaS market.
“On the downside, profit margins in this segment are obviously smaller than in the enterprise market, due to smaller-sized deals, he adds.”
This is true, but will also server to weed out the software companies without sustainable models. In the SMB SaaS space, you tend to make a little money from a lot of people, rather than traditional software selling. The profit comes over time, not upfront, so software companies have a greater need for long term relationship building skills.
On another note:
“However, there are some factors that could slow the overall growth of the software market. These include, for example, interest rates, the skills shortage and a high dollar, as well as pricing pressure, technology bundling and the relatively small number of enterprise companies in New Zealand, says Loeffler.”
I think all NZ based global software co’s have felt these pressures at some time. I know we have at times – especially the high US dollar rate. That takes a big slice from the bottom line. The factors above are all things to consider going forward. They can all be resolved given the right time, planning and positioning. One thing I can say about NZ Software companies is that they tend to be good at adapting to change. There is a huge market for SaaS co’s ahead, but we’ll all need to plan carefully if we’re to take full advantage of it.
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About the author:
Julian Stone, CEO – Project, Task & Time Management specialist for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com
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About The Author:
Julian Stone begin_of_the_skype_highlighting end_of_the_skype_highlighting is the CEO of ProActive Software, developers and creators of the leading web based project management software http://www.proworkflow.com.