Small business SaaS is catching a wave

TechCrunch reports today that Intuit’s Quicken Online sent a letter to Mint requesting proof of their phenomenal recent growth from 600,000 to 800,000 users in a couple of months. I know that’s incredible growth, but Intuit shouldn’t be surprised.

Mint has not only done amazing things for personal finance software, but they are hanging ten on a huge wave lifting everyone in the small business software-as-a-service (SaaS) market. FreshBooks just crossed over 700,000 users, and January was far and away our biggest month ever. New Zealand-based online accounting service, Xero, also boasted adding 1000 new paying customers in 50 days for a total of 4000. And Kashflow celebrated crossing 2,500 paying customers in the UK.

The Internet economy seems to be growing faster than the wider economy is shrinking. Facebook and MySpace and Google Apps are teaching millions of people about SaaS every month. Moreover, people are surprisingly increasingly willing to spend money online, even as spending trends are down in the wider economy. ComScore reported online commerce grew 2% year-over-year in January, rebounding very quickly from a 3% drop in the fourth quarter of 2008.

Of course, this positive trend will most help those who have already achieved market traction at the start of 2009. Just like surfing, only those who have already swam out from the beach will catch that market wave. And it should be a big one. So, if you’re surprised by the numbers today, just wait to see the killer numbers by the end of 2009.


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  • Rod

    Congrats to Freshbooks… you guys keep innovating… (and the movie quote contest on Twitter is fun)…

    Keep it up!

  • Joelle

    I have to say, I’m one of the more recent Min-ers and I loooooooove it. I love that it’s free, I love that it’s web-based, I love that it allows me to manage all my accounts from one spot.

    It probably won’t come as a surprise that I love Freshbooks, too. Since I started using FB, my payments come faster, I don’t spend a lot of time following up on late payments… it’s the cat’s ass… and I mean that in the very best way. :)

  • Duane Jackson

    Thanks for the KashFlow link-love.

    It’s quite funny to watch the old-guard sit back in awe at the growth of SaaS. The current economic climate is going to help too. Everything is coming together nicely all at the right time.

    Onwards and upwards!

  • Karl

    Intuit makes me laugh. I would never give them money again after my experiences with Quickbooks.

    Congrats to both Freshbooks and Mint for their growth — you show that businesses who actually care about their customers and their needs are poised to deliver products that customers actually want at an excellent price point!

  • lubos

    Quickbooks is horrible product but Intuit wasn’t really attacking because they have 800k users but because they might have not.

    With free software, any user who has ever registered and not explicitly closed the account is pretty much counted as a user. does really good marketing campaign and that means, just about everyone will try it out just out of curiosity. Question is, how many of these users remain active. Nobody believes it’s anywhere close to 800k.

    Is it fair to say that over 850k people use their software? I think it’s not. Especially for SaaS company that has very accurate data about its usage.

  • Adriaan

    SaaS is king – it allows smaller companies to distribute great software without the expensive and time consuming process of packaging & delivering & marketing. I just shows how small teams can compete with and overshadow bigger players.

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  • James

    How many PAYING customers does Freshbooks have?

    Users could mean free accounts, staff members and even customers under everyones accounts.

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  • Chris Magen

    Saas is the future, i can’t see myself buying desktop software for by business again!

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  • Jarrod Levitan

    To reemphasize, we are a SaaS company in the payable space, and we are finding exploding interest in what we do. And it’s not just in the SME it’s in the mid-size companies who have can save a ton going with SaaS and into the cloud. go go Saas!!!

  • Robert Mayer

    While I compliment all those companies generating new accounts (free or paying)
    – For all those individuals who take potshots at any company or product the has millions of PAYING customers (Microsoft, Intuit, Sage, etc.)
    – perhaps you should try to achieve even a small portion of that success before……..

  • Aaron Thies

    What’s the difference between SaaS and an application service? Isn’t this just a new way to “package” an application that’s provided online?

    Not so sure I understand how SaaS is different than what ASP’s have been doing for years.

    I do love Freshbooks though!!!