Q: In your "Software Sector Is Seeing Another Paradigm Shift" column
(http://www.sqlmag.com/articles/index.cfm?articleid=93041&), you mention
that you see a new era emerging. I don't see this happening unless users
become less sophisticated or the industry forces PCs with less processing
power and less functionality on the unwary consumer. The fact that companies
find it cheaper to support and deliver their products online doesn't
necessarily mean the mainstream of society is going to want to be harnessed
to the Internet and led by application service providers (ASPs) or ISPs. I do
see a shift in the computing paradigm to products that install and function
equally well on all platforms as the convergence of hardware and software
continue. I also expect that mainstream users are going to become more jaded
with the Internet and less inclined to spend time on the Web looking for
services, patches, and information, which I suspect will reduce the amount of
clutter we habitually encounter when trying to use the Internet. Serious
providers are going to find that seasoned users return to Web sites more for
ease of use and reliability than for fluff. Serious providers will also find
that all the flash being served actually reduces the number of seasoned users
who browse on their Web sites. Your thoughts?
A: In part, I think you missed my point. I agree this paradigm shift isn't
about the client environment. The desktop computer will be a permanent
fixture in the foreseeable future. However, what I do see changing is the
server environment. I see business executives becoming more jaded in regard
to maintaining their own custom servers for such resources as corporate
intranets and extranets. In other words, in the coming shift, fewer companies
will try to maintain their own corporate data center. This shift will occur
not only because of the cost of hardware and software licensing but also
because of the challenges in keeping their private network secure and meeting
legal requirements.
Instead, I see business executives shifting responsibility for maintaining
those resources to third parties. This is where Office Live will succeed in
drawing its customer base. In the big picture, centrally managed applications
actually fit the same pattern that you see with MySpace.com. MySpace.com
doesn't replace the desktop computer used by tens of thousands of people.
However, it does provide a third party that hosts and secures a central
server that these users can use. And MySpace.com isn't alone. Sites such as
Blogs.MSDN.com, TypePad.com, and Blogger.com also provide a central hosted
environment with a generic framework that allows minimal customization. The
result is that customers can essentially rent space instead of attempting to
create and maintain their own custom Web server and site. Customers can even
skip the server and work with a hosting provider for a custom Web site.
To a certain extent, Microsoft makes it sound like Office Live is for
consumers, but in all honesty, consumers aren't looking for the equivalent of
hosted Microsoft SharePoint Portal Server. However, businesses have found
SharePoint's sweet spot: a functional intranet/extranet appliance. Being able
to have someone else maintain SharePoint Portal Server makes it that much more
of an appliance, and paying the equivalent of about $3 per employee for that
service is cheap. Let's face it--the environment costs less per employee than
Internet service or, more important, a single IT staff member to maintain
your own bought and paid for servers and software (which requires a new
license every couple years). Therein lies the reason for the big shift.
In regard to what consumers want, I think it differs from what companies
want. Consider that Microsoft recently started charging consumers to download
a copy of the beta version of Office 2007. Don't believe me? Check out the
Download 2007 Microsoft Office System Beta 2 Web site at
http://www.microsoft.com/office/preview/beta/download/en/default.mspx.
According to this Web site, Microsoft is now in a "cost recovery" mode for
future downloads. However, you can still take a free test drive, which
doesn't require you to download or install any products. I can't imagine that
it's cheaper to provide a server to run the test drive environment than to
download beta copies, yet Microsoft is charging consumers to download beta
software, warts and all. I think Microsoft would like to see consumers take
on products like Office in a hosted environment, but I agree with you in that
I don't think that it's a viable market. We might soon find out.
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