I see the success of the software-as-a-service market rapidly gaining market share against the installed software marketplace but I am still confused. Why are organizations still buying installed software? I wonder if it has anything to do with the following:
1) Inflated software costs are attractive because it means there has to be more value in it because we are paying so much more
2) Using separate companies (partners of the installed providers) for implementation, training, integration, help desk, upgrades, support, maintenance, and hardware means I get to connect with more people on LinkedIn to look more popular
3) Installed software user group meetings are at fancy resorts, which is a nice personal vacation on the company’s dime (maybe this is why the software was so expensive?)
4) Being prioritized by my I.T. department makes me feel somewhat important because I always make the top 10 list of things to do in the next 2 years
5) I still think software-as-a-service means hosted and don’t realize that software-as-a-service organizations have on-site services that contain replicated data (especially for massive files consumed locally within digital asset management systems)
The death of installed software is near and the strangle-hold is seen by the scramble by installed software organizations to acquire software-as-a-service companies or try to “web-enable” their installed version. Let’s be clear: the service is equally important as the technology and that is a culture thing, not a software thing. There is no magic potion for installed providers, they are who they are and they cannot help it. Let me be clear about software-as-a-service benefits:
NO I.T. INVOLVEMENT: The priorities of I.T. and marketing don’t mix; let marketing continue to meet the customer demand by using service providers who understand the priorities and sense of urgency for marketing teams.
IMMEDIATE DEPLOYMENT: These services are just waiting for marketing people to move their content into, which is immediately usable.
FOCUSED PROVIDERS: Enjoy best of breed solutions for each category – with integrations across the applications.
SERVICE IS AS IMPORTANT AS TECHNOLOGY: Service providers supply implementation, training, software, integration, maintenance, upgrades, and support as part of the total package and are staffed to handle each component themselves.
INFINITE SCALABILITY: Marketing driving the growth means the explosion of digital media and internal infrastructures teams cannot keep pace with this creation at cost-effective rates. Software-as-a-service providers are already geared up to handle scalability so when you need to go from 100GB to 100TB, even for 24 hours, you can do it and only pay for what you use.
PRICE POINTS ARE SIGNIFICANTLY LOWER: Service providers are sharing in the power of user communities, shared technology, and innovation to keep costs down and price points that make installed software pricing look ridiculous.
LOWER TOTAL COST OF OWNERSHIP: There is no additional resources needed in a complete software-as-a-service model. No extra I.T. maintenance required.