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Understanding the Business Software Marketplace

  • Created: Fri 5th April 2014
  • By Raivo

This article attempts to dissect the business software marketplace into categories that should make it easier to understand how software is sold in 2014.

Web-based vs. Desktop

During the past decade web-based software solutions have become very popular, and for a good reason.

Web-based software delivery means that the end user only needs an internet connection and a browser; there’s no software to install, or upgrade. Instead, the software is always current and much of the upkeep happens behind the scenes.

The software is also accessible from anywhere - the users are not tied to a particular workstation (PC or Mac) at a particular location. Encrypted connections ensure privacy and security (though, as it turns out, not from the Government).

Desktop software shines when it can utilize all the processing power of a desktop computer, like for instance an image processing or a gaming application would.

Customer relations, eCommerce, donation management, scheduling, payroll software, however, doesn’t really require much processing power as it’s mostly text based. So a desktop version of such software would fail to utilize the full potential of a desktop. It therefore makes a great candidate to be a web-based solution.

Setup fee vs. No Setup Fee

A lot of the offerings, whether web-based or desktop programs, don’t list a setup fee on their pricing page. Instead, the pricing is given as a one time lump sum payment plus yearly upgrades (desktop) or monthly fees (web-based).

Other software vendors do list a set up fee, and in a sense put themselves at a disadvantage - on a surface it’s cheaper to go with a solution without the setup fee!

Does that mean there’s no setup activity involved?

No, we think that all software solutions, professional software most definitely, require some setup, installation, and very often training as well. Therefore, even software that doesn’t indicate a setup fee do incur an additional cost - sometimes that cost is paid in time (if the user does the setup herself), and sometimes it’s paid in dollars when the user has a vendor (perhaps a third party vendor) do the installation, setup and training.

So when comparing pricing, it is important to consider this aspect as well.

Dedicated vs. Shared

Almost all web-based software as a service offerings are shared solutions.

This means that each customer gets their own account which can have a few simple customizations, like using the customers name and logo, for instance. All of the code that makes up the application is shared among all of the customers.

This is great for the vendor as it provides economies of scale to bring the overall price down. However, each customer is limited to exactly what the vendor is offering - there’s no custom coding to incorporate customer specific business processes allowed.

Granted, some vary large software systems actually provide a programming environment to build the application instance to the exact requirements of the customers business processes. They are priced accordingly.

While the tradeoff between price and flexibility seems reasonable in the beginning, most organization tend to grow and soon run into the ceiling of what such a shared solution can do.

At Claybend Solutions we recognize this situation and offer some business software - such as Donation Management, Customer Relations Management, Online Stores - as a web-based solution that is dedicated to your company.

That means that no other organization will be sharing the code base in your instance of the software. This offers you great flexibility going forward, as we can tailor the software to your exact needs.

If you have any questions, please let us know, or 636-299-0670.

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