We were recently sent an essay from Richard Burton, a Business Studies student at Edinburgh University.
Richard’s essay entitled ‘Compare two companies’ is a comparative analysis of two very different accounting systems, Sage and Xero. Of course, he is not only comparing two companies but two opposing ways of delivering small business accounting software to the masses: software-on-a-CD and Software-as-a-service (SaaS).
There are a number of interesting points included in Richard’s essay about the benefits of SaaS, we’ve pasted a few of these below, including the swift change in VAT recently and how SaaS companies can deal with legislative changes easily.
Now that the internet has become so pervasive and, more importantly, so fast, people are starting to legitimately ask the following question: why do I need to install software on my computer if I can access it on the internet?
The economic benefits of SaaS are incredibly attractive. With SaaS, customers simply open up your web-browser, sign up for some software, and log in. The cost of delivering software to consumers has dropped massively. They can completely bypass distributors, shops, and middlemen and simply go direct to their prospective customers.
At almost every stage of this traditional software-delivery process [Software-on-a-CD] there is wasted time, energy, and money.
Xero’s accounting software evolves and improves as-and-when their developers make improvements, rather than on a forced, annual basis. This has been perfectly demonstrated by Alistair Darling’s recent announcement to drop the VAT rate to 15%. Xero just tweak their code whilst Sage have to write an update and get everyone who uses their software to install it.