You’ve probably never seen a corporate advertisement that reads “We don’t do anything better than before – we simply stick to the status quo.”   Innovative companies, especially in the multibillion dollar Human Resources software sector, often strive to set themselves apart from their competitors through new features, faster services, and lower prices.

However, this was not always the case for the giants in the HR Technology space.  Over the course of the past two decades,these “old-world” companies have actually embraced the software status quo. For years, ‘sticking with what works’ made sense, as these companies pulled in billions of dollars in profit every year from selling the same old ‘boxed’ software packages while charging for periodic upgrades, maintenance and deriving the bulk of their revenue and profit from services.

Today, these big software companies are really starting to  pay the price for sticking with the status quo for too long.  They are scrambling to catch up with both nimble startups and open minded corporations that have embraced new technologies and ways of doing business; most notably they’ve welcomed cloud computing from the very beginning.

Wharton recently published an article that provided some interesting cases of cloud computing chipping away at traditional software business models.  From knowledge@wharton:  “For example, Forrester calculated that Microsoft’s Exchange e-mail program will cost a company with 5,000 employees $28.22 a month for each user. By comparison, Google’s fully loaded corporate suite — including Gmail, calendar and productivity applications, along with technical support — for a company with 5,000 users will cost $8.59 a month for each user.”

The article also highlights the disruptive changes that cloud computing has brought to the various other corners of the software industry; including consumer productivity software, business services software, and video gaming software.  In each of these sectors, the traditional models of selling ‘boxed’ software and charging for upgrades has slowly been eroded by ‘Software as a Service’ models that instead focus on monthly fees void of any long term contracts.   Companies like Sonar 6  and Bamboo HR are offering customers #HRtech  products that exist entirely in the cloud – making access as simple as signing up online.

Another software sector that has been drastically shaped by cloud computing and SaaS pricing structures is recruiting software.   The days of a company needing to ‘unbox’ a recruiting software suite and install the program on every computer and server in the company are  long gone.  The days of having a company ‘tech guy’ walk downstairs and troubleshoot local server-side glitches are over.  There are very few companies, if any, that continue to push the innovation envelope in the world on on-premise software.

Businesses now are able to utilize applicant tracking software that exists entirely in the cloud – including communication tools, customer service, data analytics and instant updates.  Newton Software is proud to be the company that pioneered cloud-based applicant tracking software, having fully embraced a new age of delivering hiring technology from the very beginning.

Only recently have the corporations of old realized the importance of cloud computing – they’ve started rapidly buying up smaller companies and establishing their own cloud based applications.  However, they may be too slow to catch up.  Today’s world of software, one where online applications are easily accessed by anyone, is no longer about over-inundating a market and establishing a customer ‘choke hold.’ It’s about adapting to customer and providing the best possible solution for a specific niche.

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