Software as a service offers apps that actually work

Government IT pros may find something in Phil Wainewright's latest post in the Software as Services blog. The entry, "Software that actually works," points out a fundamental weakness at the heart of the "software as a product" paradigm - customers pay big bucks for software that doesn't work.

The problem for all conventional software vendors is that their business model is built around products that don't work. For some reason, customers have bought into this. They hand over their money, take delivery of the product, and then start figuring out how to get it working. Mostly, they bring in specialist consultants to help them figure it out, at even more expense. Once they get it working, they then pay the software vendor even more in maintenance charges to ensure they'll get help fixing it when it breaks again.

And in this corner, the future:

On-demand vendors have a completely different orientation. They contract to deliver a working application, and customers start paying from the day they start using it — not before (except for setup costs, if required). The notion of charging some kind of maintenance fee on top to help keep the service running is almost ridiculous. In fact, most reputable providers operate under service level agreements that mean they get paid less, not more, if the product stops working.

How much is your agency paying for maintenance and customization services to get  your enterprise software working? Have you considered an on-demand service? Is it possible to make it work, or do regulations, privacy concerns, or sheer volume of transactions make this an unrealistic opportunity?