In This Issue:
1. Editor's Note: The End Of The Beginning Of The End Of Software?
2. Today's Top Story
- Analysts: Start Planning Now For Big Office 2007 Migration
- Microsoft Releases Office 2007 To Manufacturing
3. Breaking News
- Attacks Launched Against Unpatched Windows Bug
- Cognos Targets Banks' Customer Data With Latest Performance Blueprint
- Palm Hit By NTP Patent Suit, Shares Drop
- Four Industries Expected To Top Half Of Online Advertising
- Hackers, Plagiarism Claims Hit Wikipedia
- AT&T Targets Outsourcers With India Long-Distance Service
- Five Charged With Conspiracy To Export U.S. Defense Info To China
- United States Cited As Top Spam Nation
- Company Creates Cyberbikes To Whip Young Gamers Into Shape
- Holiday Season May Not Be Joyous For PC Makers
- eBay Offers Shopping Index Of Hot Items
- E-Voting Gaffe Reported
4. Grab Bag
- Saving Democracy With Web 2.0 (Wired News)
- Five Gadgets You Don't Want To Be Seen Wearing (TechEBlog)
- Do The Rights Of The Disabled Extend To The Blind On The Web? (NY Times--Reg. Required)
5. In Depth: Software As A Service
- Software As A Service Faces Its Next Big Test
- Under Construction
- PeopleSoft Founder Duffield Takes The Wraps Off His New Company
- Microsoft Revises Licenses To Support ERP App Hosting
6. Voice Of Authority
- Pig Freezes Over, Hell Flies, Microsoft Supports Linux
7. White Papers
- Best Practices In Budgeting, Forecasting, And Reporting
8. Get More Out Of InformationWeek
9. Manage Your Newsletter Subscription
Quote of the day:
"I don't know exactly what democracy is. But we need more of it." -- Anonymous Chinese student, during protests in Tiananmen Square, Beijing, 1989
1. Editor's Note: The End Of The Beginning Of The End Of Software?
As Winston Churchill so famously declared, "This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."
He could well have been talking about the long-predicted death of software.
Various people have been anticipating the demise of traditional applicationswhat some people are now calling "location-based software"since software as a service emerged in the late 1990s as something to be taken seriously. In fact, as Rick Whiting reports in his in-depth report on pay-as-you-go IT services, InformationWeek was the first to proclaim "The End Of Software," back in October 1999. (Salesforce.com, one of the early darlings of the software-as-a-service industry, later adopted the phrase as its slogan.) Major vendors, including Oracle, IBM, and Microsoft, are now actively pursuing revenue opportunities using the model.
Yet the promise has been largely unfulfilled. Even in the CRM arena, where software as a service has made the greatest inroads, services that deliver sales, marketing, and customer service functionality over the Web accounted for just 8% of revenue in 2005, according to Gartner. Although this is expected to increase by 50% by the end of 2006, that still represents just 12% of all CRM dollars spent. And a mere 4% of ERP and supply chain management software revenue in 2005 came from services.
If you focus in on the small- and midsize-business marketplace, the numbers are considerably more impressive. On-demand CRM services account for as much as 30% of that market, according to the Yankee Group. Accounting functionality delivered as a service to SMBs also is booming. Companies like Intuit, NetSuite, and Sage Software are seeing revenue from online offerings skyrocket. Indeed, according to the Yankee Group, more than 60% of SMBs say they see on-demand services as their best bet for slashing costs and boosting employee productivity. In fact, in a singular reversal of the usual state of things, we're seeing smaller vendors lead the way with technical innovation.
The benefits of software as a service have been widely touted: No massive up-front investment in technology that takes months, if not years, to implement. No need to purchase and maintain hardware infrastructure. The flexibility to move quickly to new technologies as they become available.
But enterprise IT managers also have been understandably hesitant to try the software-as-a-service waters. First up: performance. Can applications delivered over the Web consistently offer users in large companies what they've come to expect from traditional location-based apps? Can the services scale appropriately? Also, although providing users with universal access to applications and data via the Web is an attractive proposition, it raises serious security issues. Finally, trusting that third parties will keep their services always availableand corporate data secureis not something that comes easy to IT managers. As it is, there have been a number of well-publicized outages on Salesforce that denied customers access to its services.
Despite all this, it's my own belief that software as a service is indeed the future of enterprise applications, especially as more vendors provide APIs and other ways to customize and integrate their services with other applications (both traditional and on-demand). Even Gartner, looking ahead, believes that within five years as much as 25% of new business software will be delivered as services.
In short, we're nearing the end of the beginning of software-as-a-service adoption. It'll be interesting to observe how fast the end of the end comes. I'd be surprised if we don't see numbers that dramatically exceed what's currently being predicted.
What do you think? Has your firm implemented software as a service? Are you considering it? Let us know your experiences by responding to my blog entry.
Palm Hit By NTP Patent Suit, Shares Drop
The suit alleges that Palm's products and services infringed NTP's patents and seeks recovery of monetary damages resulting from Palm's direct and indirect infringement.
Holiday Season May Not Be Joyous For PC Makers
Declining home prices and slowing economic growth are tightening purse strings just as PC makers hope consumers will spend more for upgraded hardware to take advantage of new features in Windows Vista, set for release in January, analysts say.
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