Categories: Founder's Blog


Sam Bayer


Is SaaS hurting the economy?

Well…the actual title of the ComputerWorld blog posting by Mark Everett Hall is “How SaaS hurts a fragile IT economy” but there is no doubt that Mark is labeling me as a traitor.  I’m one of a growing number of industry executives who are killing our IT economy…so he suggests.

I think it’s fascinating that he and I can agree on all the major arguments for SaaS and come to totally different conclusions.

Mark clearly gets the fact that we’re good for the overall manufacturing sector.  He opens (and closes) his blog posting with this observation:

“Software as a service is a wonderful choice
for a business manager. Instead of investing in a packaged software
product and the new servers and network gear to support it, along with
a cadre of highly-paid professional IT staff to implement and manage
the software, a business executive merely subscribes to an existing

He then goes on to link the second sentence to the negative consequences of SaaS’s growing popularity:

  • less employees at software makers like Microsoft and SAP
  • fewer internal IT projects which means a reduction in IT headcount
  • less employees at hardware makers and their supply chain
  • lowers overall IT worker salaries

He concludes his diatribe against SaaS by declaring that eventually “SaaS will be described as just one more nail in the career coffin.”

Frankly, it is this sort of protectionist, non “customer-value-adding” thinking that has gotten us into our current financial mess.  Not totally mind you, since corruption (think Madoff), unregulated complex financial instruments (think Credit Default Swaps) and resource sapping wars have had something to do with it as well.

But this is the type of thinking that must have prevailed around the time that Gutenberg introduced movable type, any of Thomas Edison’s inventions were released (phonograph, motion pictures or electric light bulb) and Henry Ford’s Model T rolled off of the assembly line.

Progress always has its detractors.

If you’re not adding value to the economy by either figuring out new ways to do things more efficiently, or by enabling new things to happen, you have to know that you’re vulnerable to those that are.

Not everyone has the good fortune of having the United Auto Workers negotiate their contracts so that you can get paid for doing nothing even after you get fired…creating the so called “Jobs Bank“.  And we all know where the auto industry is heading.

I don’t think any of our clients think we’re bad for the economy because we’re able to help them deliver significant value to their customers in record time with minimal effort and free up precious resources in the process.

I also don’t hear my lawyer complaining much about how bad we’ve been for his business, nor my accountant and banker about theirs. I would say that the various consultants, subcontractors and service providers that we employ are grateful that we’re a SaaS provider.  In a circular sort of way, I’d say that the other SaaS providers like Quickbooks, CentralDesktop, Skype and SurveyMonkey who we pay our monthly fees to, are probably pretty happy that we’re in business as well.

I don’t think we’re hurting the economy one bit.

I think “we’re a wonderful choice” for business and the economy!

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