LightSpeed Cloud: A Case of Retail Transformation

Right at the end of 2011, when everyone was gearing up for New Year celebrations, I looked at Lightspeed, a Mac-based POS (point-of-sale) designed for large retail businesses. It’s a mighty impressive piece of software but at over a grand for a single user licence (they start at $1,098 each — and that’s without the POS hardware!), it’s certainly not a cheap piece of kit.

However, since then, some major transformations have gone on within Lightspeed Retail, the developers. A few days ago, they acquired MerchantOS (a former rival company) and merged the two products into a new one called LightSpeed Cloud. Unlike the former product, which was confined to a single Mac, the new version now allows users to access their retail data from whatever device they are using — a real boom for retail businesses who use devices such as tablets and mobile phones in their day-to-day life.

Yet Another Transformation Into the Cloud?

Those of you who read my recent feature on Billings and Marketcircle will know my opinion on the whole SaaS (software as a service) malarkey. In short, it boils down to the fact that I would rather pay for my software outright, rather than simply “renting” it from a company for a fixed cost every month. I was a tad disappointed with Marketcircle in that they chose to pursue this model and essentially force me, when the support for Billings runs out, to shell out $5 monthly for software that I have already paid for.

And it seems here that I’m not alone. A recent article by Jason Cohen on VentureBeat explains the “trap” of the SaaS business model (the author is a bit of a pottymouth, but you get the picture) — they remain unprofitable for the first 18–24 months (as they are recuperating the cost of the initial software) before turning, and continue to turn, a profit afterwards. So users end up paying more for software in a subscription model rather than if they bought the product simply outright.

Let me stress here, that I’m not comparing Billings and Marketcircle to LightSpeed and their new Cloud product, because they are about as similar as chalk and cheese. A single user licence for Billings will set you back $5 monthly; for LightSpeed Cloud it’s $79 (for 1 register and 3 employees). “Large” companies — so those with 4 registers and up to 20 employees — will have to fork out $199 a month for the privilege of using Lightspeed’s cloud system, and extra registers after that clock in at an additional $35. An interesting structure, I thought, so I decided to whip out my calculator and do a couple of sums.

For my calculations, I took an average retail store with 4 tills. With LightSpeed, this would obviously correspond to 4 user licences. Under LightSpeed Pro, this would set you back $4,550 for the “Better” plan, which includes support for the POS hardware (cash drawers, barcode scanners and so on). Over 24 months, this works out at just shy of $190 monthly — not an unreasonable figure for a semi-large store. But after that initial cost, the software is yours to keep (and I’m guessing you’re assuming that your store will still remain in business and profitable after those 2 years).

With LightSpeed Cloud, for 4 registers and up to 20 employees, you pay $199 a month (or $179 a month if you pay annually). Yet you still carry on paying for the software, for not that much added benefit. One advantage is that there’s no contract tying you down — so you’re free to waltz off after 2 months and take your business elsewhere if you like. But there’s no integration with the Cloud and Pro products: it’s either one or the other. Like I said, this is completely different to Billings and Marketcircle, where they ditched the standalone product in favour of the “Pro” cloud-based service, so at least users have the choice. If I were a retail owner, however, I think I know what I would prefer to do.

LightSpeed Cloud is Great, However

If you’ve managed to get up to this point without seething in rage or going off and reading something more enlightening then I owe you two things. Firstly: a thank you, and secondly: a clarification. LightSpeed Cloud is an extremely fancy piece of software, and I’d like to say a massive Félicitations! to the Montreal-based developers for coming up with something so impressive. It always excites me when business software looks and feels the part — and LightSpeed is the perfect example of this.

In the Cloud version, the developers have toned down the fancy GUI slightly in favour of a more functional web-based interface — yet it certainly isn’t stingy in the features department. The fact that LightSpeed Cloud works not only on desktops but on all compatible devices (iPads, iPhones — in fact anything with a web browser that supports HTML 5) means that transactions don’t have to be confined to the checkout — employees can take payments and look up stock anywhere in the store, as long as they have their device with them (and just look at how well that works in Apple’s own stores).

LightSpeed Cloud is, in essence, the Pro version on a slight diet. With both versions, you can still run a retail store absolutely fine: it just depends on what you prioritise. If you’re looking for a POS system that oozes with Mac-y goodness, then go for the Pro version; if you want something accessible from wherever you are, then go for the Cloud version.

Cloud Is the Future

With LightSpeed Cloud, we are seeing another piece of software migrate to the cloud in the form of SaaS (software as a service), which seems to be the primary focus for a lot of software developers nowadays. But it isn’t necessarily a bad thing. Sure, I complain about having to “rent” my software, but if the service is good, secure and works 99% of the time (the odd downtime is to be expected) then I don’t mind paying at all — as long as it isn’t excessive.

Cloud computing is the future, and indeed the job I am due to start in September involves working in retail consulting with SAP (an ERP system) and cloud computing (one of the interview questions was themed around it!). So, unless the company sees me as a disposable object, I guess it’s here to stay. A recent article in The Economist (which is well worth a read if you’ve got time) focuses on banks and migrating to cloud computing platforms — some banks are now “renting” space on Amazon cloud platforms to perform complex tasks, such as credit-risk processing. Cloud-based systems are the future, and although some may see it as unnecessary, LightSpeed have made an extremely sensible step, especially as they are not abandoning their traditional, stand-alone project of LightSpeed Pro.

So I take my hat off to the developers for designing such a great product and I do hope it catches on in retail stores across the globe soon. It is certainly an experimental step but one that doesn’t ostracise the businesses who don’t want to have to resort to Macs just to run their POS systems. To quote Dax Dasilva, LightSpeed’s CEO, in a recent interview with TechCrunch:

We want to be able to say yes to everybody.

Fortunautely, Dax, I think you already are.