September 21, 2005
The end of licensed company software – software as a service
The introduction of client/server technologies enabled company software to revolutionize company IT in the 1990´s. For the first time, low priced standard computer technology and standard software began to be used for company IT processes, replacing mainframes and proprietary, bespoke software.
ERP was and is the most successful area of deployment for company software. More recent developments such as CRM and e-commerce have, however, led to a significant loss of momentum in company software.
This is mainly attributable to the problematic nature of the price-performance ratio of company software, the software manufacturer only being partly responsible for the economic success of the installation.
The customer – the company in this case – is left to bear the sole responsibility for hardware, operation, maintenance, upgrades and further development, leading to the failure of many projects or simply to incalculable financial risks. Traditional ASP models have largely failed in their attempt to address this problem.
For the future, we see mainly two models of company software: open source and software as a service (on demand). On-demand services could potentially completely replace licensed company software. CRM and e-commerce are two areas where analysts and visionaries expect to see rapid domination on the part of on-demand solutions.