Internet Trends and Effect on SaaS and Cloud Computing Businesses

In the middle of April, Morgan Stanley came out with their 2010 report on the Internet Trends. It provided a lot of interesting graphs and diagrams which showed that as the internet users grew by 13% year-over-year and the time spent online grew by 21% year-over-year, the mobile internet usage was expanding at such a pace that within 4-5 years the mobile internet users would surpass the desktop users. 

This observation leads to the logical conclusion that the SaaS and Cloud Computing business will dominate the software industry. This conclusion is supported by a) mobile devices have inferior/limited computing capacity to desktop devices, therefore cloud computing is the way to go, and b) the continuous, rapid improvement in coverage and accessibility to data services for mobile devices (3G/WiFi) will lead to faster and easier access to the social networks and content sharing websites, which together hold the largest share of global online time spent.
So what does this mean for the SaaS and Cloud Computing businesses? The Morgan Stanley research suggested that the main factors for mobile applications differentiation will be ease-of-use and price. Also, the rapid shift of the internet environment will inevitably lead to the need for drastic changes of the internet business models. Now is the time for the management teams to really take charge of the market. So, if your company is working on facilitating the mobile device access to your service then you are on the right path. If you have a good product but you don’t have the capital to take it mobile, maybe it is time to start researching the venture capital firms and a prepare to raise venture funding.