Software-as-a-service: Phase II

Martin LaMonica has a report on how IBM is gearing up its hosted services to deliver applications via the Internet. After the success of companies like salesforce.com and Web portals, IBM figures that the move to software-as-a-service is poised for growth. Of course, IDC thinks so, too--the research firm predicts 26 percent annual growth for hosted software over the next few years. Earlier this week, IBM acquired Corio, an application service provider hosting applications such as PeopleSoft, Oracle, Siebel, SAP, Epiphany and Ariba, to expand its footprint among medium-size businesses.

Now IBM is working with a variety of software companies so that it can offer hosted software bundles on its hardware and software infrastructure. You could call this IBM's infrastructure-as-a-service, creating cookie cutter data centers that run pre-configured applications, tuned to its middleware and hardware, across the Net.

It's on-demand computing: you demand it, IBM supplies it from the front end to the back end with a healthy profit margin.

Fortunately, IBM isn't the only major vendor pushing infrastructure-as-a-service--all the usual suspects will aggessively ramp up hosted services this year. Enterprises will hold off on buying into software- and infrastructure-as-a-service because of security issues or a lack of sufficient service-level guarantees or cultural resistance. (What happens to my IT staff?) But this train has left the station. Over the next few years--as enterprises get past capital expenditures off their books and onto eBay--the concept of owning your own power plant (infrastructure) for basic applications will seem absurd. However, there are a lot of absurdities we live with for years beyond what you would think is reasonable. Owning and running your own hardware and software may be one of those...