May 19, 2007

SaaS Making Inroads in the Consumer Space

Software as a Service (SaaS) is the latest trend in the software development industry. Everyone wants to deliver their software as a hosted service that you rent rather than purchase and install on your own servers. The high-flying is the poster-child of SaaS. Even SAP is wrapping itself in SaaS clothing these days. (See my previous posts).

There are some interesting trends taking place in the consumer space. This year, tax season has been rather good to Intuit, despite a few hiccups in last-minute online filings. Intuit just released their quarterly earnings, and they had their first $1 billion quarter-- $1.15 billion to be exact. GAAP net income came in at $367 million, which is not too shabby. (Details)

Apart from the nice revenue, there are some interesting trends in Intuit's Turbo Tax unit sales for this tax year:
  • Intuit sold 6,942,000 copies of its shrink-wrapped Turbo Tax software that you install on your desktop. This was a 2% drop from last year's sales of shrink-wrapped Turbo Tax.
  • Unit sales of Turbo Tax for the web increased by 16% to 6,042,000.
  • Another 1,422,000 users filed for free with Turbo Tax for the web, a 3% increase over last year's numbers.
  • Altogether, more people (51.8%) filed with the hosted (web-based) version of Turbo Tax rather than the version installed on your desktop.
For years, most people have been using a hosted e-mail provider (e.g., Yahoo, Google or Hotmail) for their personal e-mail. The latest sales figures from Turbo Tax show that consumers are comfortable with using hosted applications for their financial data. It will be interesting to see how Google does with its Google documents-- a suite of hosted office applications.

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