Do you get angry when you come to know that you are being referred to as a user? Josh Bernoff feels so. Don Norman feels people is a more appropriate term. I use the term user a lot as a software developer, but I also agree that user can be used wrongly. Let me clarify.
One of the basic principles of software development is to build it for the one who is going to use it. This is where the term user comes from. User is not an individual here, the term user is just a label or a handle if you will for a profile. It is a matter of convenience, and let me be bold enough to say that sometimes being impersonal helps. There are times when I want to think about the technology, of course for the user, but not about the nuances, but about extracting the best from the technology. It is extremely convenient in finding out what is common across the individuals who will end up using my software. It helps me abstract, it helps me build extensible and flexible software.
However, as a designer there is a different angle for which one has to travel the distance between the user and the individual or the person or the reader. It is a critical task to make the software more for humane, consider the individual’s knowledge, habits, conveniences and comforts. This is where you observe, understand and identify with them.
I think a user and a person, both are required in software development. But when a software rolls out, it should solve problems, help do tasks better, increase efficiency and accuracy. When I hear the word user it seems to be more about using the software than using the software to perform a task or solve a problem. The term user rings about reading manuals to understand the way a software works and accustom to it. Today software has penetrated our lives in multiple aspects and we will end up changing our lives if we keep doing it. I think this is where the term user starts getting a bit harmful. The softwares will be effective if they can adapt to us, and this is what is being stressed when the users are being replaced by people or individuals or persons.
Of course there are also various terms like user-generated content, which Jon Udell thinks should be reader-created context. But it is not as much about the terminology as it is about realizing that the communication can no longer be one-way. The reader wants to contribute, and not just be a consumer but also play a producer.
Duncan Riley wants to be called a user, and I am sure I know many more who think of user in a positive way. I do not think the term user is derogatory, as long as you do not try to neglect people with it. In fact I love the term users, and user-centric software, if it helps in solving problems and enabling them to do more with their time and skill.