When a web application gets popular enough, features matter less and the underlying ecosystem matters more. There’s a tipping point at which network effects outstrip software features. When that happens, users get the benefits of additional functionality — and the risk of new kinds of lock-in. Salesforce.com, for example, started as a replacement for in-house software. Now it’s a software ecosystem complete with a programming language, developer conferences, and a marketplace for third-party developers. That makes Salesforce a lot harder to leave than if it were just a bundle of software features.
Freshbooks, whose SaaS-based billing tool tracks time and expenses and sends invoices to customers via email or post, is at that tipping point. It’s grown to 900,000 subscribers using a mix of free and paid offerings. Now that there are so many users, subscribers often wind up sending bills to one another. So the company made it possible to send those invoices within the system directly, bypassing external email. Today, Freshbooks revealed that 20 percent of its subscribers had adopted this new capability — taking Freshbooks from software tool to SaaS ecosystem. Continue »


Customer relationship management giant Salesforce.com just gobsmacked the fledgling community management industry with its launch of 

