The days of purchasing shrinkwrapped software from a box are numbered, thanks to the rise and rise of cloud software. Here’s why that’s a good thing.

The last time you bought business software you probably drove a suburb or two to OfficeWorks or another mass retailer, picked a shrinkwrapped box from the rack and loaded the DVDs onto your work computer.

That method of buying software will one day join memories of making mix tapes on audio cassettes.

By now most people have heard of cloud computing. It’s a complex topic but the most relevant facet for soloists is software-as-a-service (SaaS), commonly known as cloud software, which is accessed online through your browser. Gmail and Hotmail are consumer examples, or for business you might know SalesForce.com and Google Apps.

Cloud software will become the preferred way of delivering software for several reasons, all of which are good news to micro businesses.

Access anywhere

You can use cloud software anywhere you have access to an internet browser. With a smartphone or tablet like the iPad you can look up all your customer records, documents and presentations or outstanding invoices whether you’re sitting in the car, in a client’s office or away on holiday. All you need is access to the internet. You don’t even need your own computer on hand – any trusted computer will do.

No more upgrades

You are no longer forced to buy the latest version of a program to read a client’s file. Everyone logs into the same version of cloud software. It also means that you always enjoy the latest features as soon as they’re added.

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Trial today, for free

Almost every type of cloud software offers a free trial for a limited period (usually 30 days) during which you have full access to all features of the program with your own data. Most shrinkwrap software has limited try-before-you-buy options; you just take a punt and hope it’s the best.

Group editing and viewing

Instead of emailing MYOB files to and fro, for instance, your accountant can log in at any time to view your figures and create reports. Or work on a project spreadsheet with the client who can view progress and edit cells (if you wish) at the same time you’re updating it. This is known as online collaboration.

No more versions

Cloud software creates a single document which many people can view and edit at the same time. This eliminates the practice of emailing a new document to colleagues and dealing with multiple versions that need to be reconciled with Track Changes. You will never again ask, “Who’s got the latest version?”

Enterprise software for less

Cloud software is often billed on a per user, per month basis at a rate that works out much better for micro businesses that don’t want to spend thousands of dollars on a top-shelf customer database used by large corporations. SalesForce.com is one example.

One caveat: Some cloud software is more expensive than its desktop counterpart, such as cloud accounting software. However, businesses seem happy to pay the higher price in return for the advantages of using cloud software.

Integration

Big business will customise IT to fit the way they work. Small businesses make their operations fit the IT they can afford – connecting applications to share information is just too expensive. But cloud software is generally written according to web-based standards and can integrate with other cloud software very easily. For example, there are all sorts of applications that work with cloud accounting software to classify receipts, monitor share portfolios, manage projects and so on.

The downsides

It’s not all roses, of course. If you spend a lot of time on planes or in regional areas then the fact that you can only access cloud software witho an internet connection can become a major problem. The solution – to have a fall-back conventional shrinkwrapped software program on your laptop – is clumsy but unfortunately necessary for many.

Some business owners are also worried about where their data is being stored and who can read it. I think these concerns are overblown given the popularity of online banking, but concerns remain.

So the next time you decide to upgrade your office applications, check out whether the vendor has made an online version too. It might save you money or time, or improve the way you do business.