On-Demand Computing: Will It Ever Be Profitable?
Date : 22 Jul 2008 Category : Technology
NewsFactor NetworkAt the outset, the Internet ushered in an exciting new era of corporate software. On-demand computing -- its poster child Salesforce.com's grinning, rosy-cheeked Marc Benioff sporting his once trademark "No Software" button -- promised low-priced, convenient delivery of applications. Buyers would save on consultants, because vendors would host the applications and just rent access via the Web. No more obnoxious upgrade cycles, because software would be improved and tweaked daily. And if the software didn't live up to expectations? Just cancel. Businesses didn't invest in installing and configuring the software, so there was no lock-in.
Traditional Software Marketing
On-demand represented a welcome break from the traditional way of doing things in the 1990s, when swaggering, elephant hunter-style salesmen would drive up in their gleaming BMWs to close massive orders in the waning days of the quarter. It was a time when representatives of Oracle, Siebel, Sybase, PeopleSoft, BEA Systems, or SAP would extol the latest enterprise software revolution, be it for management of inventory, supply chain, customer relationships, or some other area of business. Then there were the billions of dollars spent on consultants to make it all work together -- you couldn't just rip everything out and start over if it didn't. There was too much invested already, and chances are the alternatives weren't much better.
Funny thing about the Web, though. It's just as good at displacing revenue as it is in generating sources of it. Just ask the music industry or, ahem, print media. Think Robin Hood, taking riches from the elite and distributing them to everyone...