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.
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