The Internet is finally coming into its own as an enterprise software delivery platform. As reported in the July 7 issue of Computerworld companies such as Sequent, EDS and Cardinal are preparing to offer enterprise software for rent across the Internet. These offerings are early for New Zealand, but late when compared to counterparts in the US and Europe. A two-month-old US group called the ASP (application service provider) Consortium now includes 60 industry players including Lucent, Cisco, AT&T, UUNET and Sun. They are aiming to quickly set standards for this new industry. As usual some significant players are staying out at this point. So what’s new about renting software applications? And how is this different to bureau operations of the past? Besides the obvious distinguishing attribute of Web delivery, the other defining aspect of this new wave is that it’s mostly about delivering standardised software. This is why it is growing, and is predicted to grow even further, so fast. It’s not just about bringing ERP (enterprise resource planning) to a group of users who previously couldn’t afford it. That is the game of some, but other ASPs in the US are already offering accounting software, Microsoft Office 97, Outlook and Access, to name a few. Locally Microsoft is talking about offering BackOffice through its new Telecom/EDS alliance. IDC predicts that worldwide the renting of ERP and CRM (customer relationship management) software will grow from $US150 million this year to $US2 billion within four years. However, the total "application outsourcing market" figure is predicted to reach $US16 billion in that time. For those who choose to rent software applications there will be an impact on software licensing. The pay-per-seat system will eliminate a lot of licensing dollar "wastage" for IT managers and should simplify or eliminate licensing management issues. Meanwhile, more and more "boxed" software is being distributed online. IDC predicts online software distribution will reach $US32.9 billion within four years starting from a base of $US3.5 billion now. A related concept, electronic licence distribution, is growing even faster. This is a service, usually offered in conjunction with a reseller, which allows corporates to track and manage software licences and usage. The Internet is finally doing to the software industry what it’s been doing to other industries. IT departments, like music and book customers before them, will be the beneficiaries. Your opinion counts. Don’t hesitate, email me at email@example.com. Email your thoughts for publication to firstname.lastname@example.org.
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