The Next Big Thing

One thing that has been clear since the days when the ASP model was first discussed (or long before that with the service bureaus of the  60s and 70s) is that today’s software licensing models are not really set up for this level of flexibility, even if the machines are hosted internally.

Virtualization has increased the license cost drastically in many situations, providing extra revenues to the software vendors (ISV) -- Cloud computing is disrupting the software licensing model.  It almost forces the software vendor to move into a SaaS model to address many of the issues. For those software companies that are used to a model where they write the product once but sell it many times over, replacing their license revenues with transaction or hourly access models may disrupt their cash flow. It does provide an on-going revenue stream but can still be scary at the start.

This leaves the opportunity open for start-ups that do not have such concerns and actually view the OPEX intensive cloud model as a good thing, since it allows them an opportunity to expand quickly when they are still cash strapped.

For businesses who need services, understanding the drivers for the service vendors and how they benefit from the offering over the long haul can be a key differentiator. There is almost always a degree of lock-in for SaaS offerings, so your company can be on the line as much as the service provider when things go south.

One thing I’ve blogged about for a while is that ubiquitous computing is becoming more common. The fact that as devices get smaller and they consume less power at the same time as our ability to create sensors to monitor a wider variety of our lives, mean that they can our lives in whole new ways – literally.