תפריט נגישות

? Its the End of the (SW) World as We Know it

האם המודל של רכישת תוכנה עומד בפני שינויים מהותיים. המאמר דן בנושא רכישת תוכנה מול שכירת השירות לאור פעילות Salesforce.com. (המאמר בשפה האנגלית)

 

Its the End of the (SW) World as We Know it?

Part 1: Salesforce.com: a new computing model?

 

On Demand SW

To hear Salesforce.com’s CEO Marc Benioff tell it, the traditional enterprise application SW providers are all dinosaurs and will soon be extinct, due to the catastrophic meteoric hit Software.com and other on-demand solutions will cause on their ecosystem. In this view of the SW world, why would anyone want to buy and install expensive SW when you can rent functionality for a small price per month, and get enabled within a few hours. And indeed, this all sounds like a good argument for lower cost and increased ROI. But is the large customized application installation really dead? Isn’t this the same time share versus client server argument all over again, albeit with new technologies (e.g., Internet, Java, ubiquitous broadband)?

This is a traditional rent versus buy argument. Just as often it makes sense to buy a custom built home with lots of extras and special features, rather than rent a condo in a large pre-fabricated building, so too it sometimes makes sense to buy applications versus renting them. To be sure, on-demand software is an attractive and appropriate choice for certain types of users. And it’s not only for the SMB market. Many large organizations can benefit from this cookie-cutter approach to SW, with an almost instant ability to turn on an application and get users up and running, especially if they have uncomplicated or common functionality. The On-demand crowd, especially apps providers like Software.com, are the mass retailers of the app space with what-you-see-is-what-you-get efficiency, while the traditional players are more like the high end department stores, offering specialized services, support, delivery, etc., all for a price of course.

 So how to decide which to buy? On-demand SW is best for users who have relatively uncomplicated needs that can be served by standardized apps that require minimum customization. Yes, companies like Software.com have built up an entire ecosystem of add on components of specialized functionality, but even these are “standardized” mass market offerings with minimal ability for true customization. The more traditional platforms (e.g., Oracle, SAP, Siebel (soon to be Oracle)) are best for those organizations that have very unique needs that needs to be incorporated into fully customized applications. This is both time consuming and expensive, but it offers features/functions unavailable from the mass merchants.

 Bottom Line: Don’t buy into the hype that on-demand software with its relatively low cost and ease of deployment will take over the entire market. It does indeed have an important role to play, but requires a full time broadband connection (though some off-line capability is being added), and all data resides at the app providers’ location. This means there is a potential for a single point of failure, and scalability could also be in question if the company grows too large (i.e., Salesforce.com currently runs all client apps from a single location in the Bay Area, though it is adding distributed locations). But, traditional applications (e.g., Oracle, SAP) often require multi-million dollar investments and 12+ months of role-out before being functional. Companies should therefore carefully weigh the investment versus functionality requirements and decide not on market hype, but on a strategic analysis of best efficiency of the specific roles within the entire organization.

 

כותב המאמר הנו

JACK GOLD

jack.gold@jgoldassociates.com

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