Future software programs may be based online
Published 5:28 pm Thursday, August 28, 2008
By Sven Mogelgaard &Will Rutherford
Tech Talk
We’ve always figured that sooner or later applications such as calendars, word processors and spreadsheets would be Web-based. All we’d need to do is log on, open our browser and we’d be able to pick up work where we left off.
In recent months, the way this new software world will be populated has changed. Presently, users must install applications on a computer to perform regular tasks like writing a letter or creating a presentation. The expense of licensing and maintaining software for every computer in an organization can be high. Many users don’t even use many of the features the software offers. Also, staff needs to frequently install updates and purchase upgrades to the software.
The new model is being called Software as a Service (SaaS) or Software + Services, as Microsoft calls it. This allows a business to take applications off of individual computers and put them “in the cloud” — on a corporate network, the Internet or both.
In its simplest form software on demand lets users access their applications and data by simply connecting to the Internet. It’s not just the users that benefit from this model.
The research firm IDG estimates that the revenue opportunity for software-on-demand providers will reach $14.5 billion by 2011. This model has become more or less the wave of the future.
With the proliferation of high-speed internet connections and secure Virtual Private Networks, almost any business can take advantage of the potential savings and flexibility of on-demand access to applications and data.
In our opinion, it’s not a matter of if, but when software on demand becomes the number one method of software distribution for businesses. If you have any doubt, look at the proliferation of Web 2.0 sites like Facebook, MySpace and dozens of others that provide immediate sharing of content.
Unlike the Google Apps and Highrise solutions we covered in our March 2008 column, which only offer hosted (Web-based) versions of their products, Microsoft plans to offer its services in a variety of ways. For some businesses, Microsoft will host the software on its own servers. This arrangement will help small businesses, businesses with minimal IT support, or any business that simply does not have the need or the desire to manage the infrastructure necessary to make these services available locally. This arrangement also relieves the user of the need to manage updates and upgrades to the software.
The biggest difference in the way Software + Services can be deployed is that businesses or resellers can host these services themselves. For example, larger corporations with full-time IT departments may want to host some – or all – of the services themselves.
The Wow! factor is that the ability to host applications on non-Microsoft servers opens the door for resellers to host, manage and deploy software and services. With almost $15 billion on the table in the next two to three years, it wouldn’t be much of a surprise to see more providers offering similar services in the next few months. The biggest challenge providers of software on demand will face is the quality of the end-user experience. Even today, Web-based applications offer significant difference in the way data is presented and accessed.
For example, users can view my Google Apps calendar from a Windows Mobile phone, but can’t add or change appointments. Printing of Google Apps documents is different when using a Mac versus a PC. Highrise can be slow and quirky from a phone or a PDA.
We still love these applications despite these shortcomings. However, the first vendor to provide a reliable and consistent software on demand interface that works well across multiple platforms is going to be poised to cash in.
In October, we will report on major software companies’ plans for deploying software-on-demand solutions. In the mean time, visit us on our Web sites to tell us your views on this topic.
