Sightings in SaaS

We came across several news articles this week announcing the passing of Henry Taub. Mr Taub was the founder of ADP or Automatic Data Processing, one of the world’s largest information services companies. You might not have heard of Henry Taub, and likewise you might not comprehend  his impact on the information services industry. He was no Larry Ellison or Bill Gates, but a far simpler, humbler man, who nevertheless continues to have a lasting impact in the realm of enterprise information and computing.

The articles discussing Mr Taub and his legacy are fascinating. When you think about the simplicity of his idea, performing timely payroll services, and how he made it into such an incredible company, it’s almost hard to believe.

But that’s not the end of it. This line from WSJ really caught my attention:

The firm promised reduced clerical errors and fewer late paychecks—union rules required that workers got paid overtime when checks were late—but many employers were initially reluctant.

“The notion of letting people see your private records was pretty foreign,” said Mr. Lautenberg, who went on to become CEO of Automatic Data Processing—as the firm was renamed in 1958—and then U.S. senator from New Jersey. ADP’s red-and-white vans became a familiar sight as they delivered checks.

You might think that Mr. Lautenberg was talking about software as a service; certainly, any NetSuite solution provider has heard the objection about a company’s private records many times. That your data could be held safely and securely in a remote location, and that your data and that of many of the 550,000 other businesses ADP services could all be in the same database are still ideas that a lot of people have issues with, yet ADP continues on as strong as ever.

In many respects you could say that Henry Taub was the father of software as a service, not that he would claim the title himself. But if you think about it, what he was doing was a precursor of the modern SaaS industry. Multiple clients, one mainframe, payroll as a service.

The other thing of note about his business was that it was really enabled in large part by the hardware produced at IBM. The software and information services industries have always had this necessary relationship with the hardware guys, but what I find interesting is that by being in the right place at the right time, Taub and ADP were able to take advantage of the mainframe. It’s not like they were waiting around for the mainframe to come on the scene and then they decided to launch a payroll service. They were actually doing payrolls on adding machines and delivering them by bus in the earliest days. But you make your own breaks in this life, so when the hardware appeared they had the tools and ideas to take advantage and build a business.

I owe a personal debt of gratitude to ADP. They hired me when I was a young smart aleck and let me cut my teeth not only on information services, but on Oracle Financials, which they used for billing. I also miss business people like Henry Taub. They quietly put in the hours and the effort, built great businesses and found time for family, friends and community without a lot of fanfare. We need more Henry Taubs in the information technology business today.