Software-as-a-service: Phase II

Software-as-a-service: Phase II

Summary: 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.

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TOPICS: IBM
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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...

Topic: IBM

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  • Remember the ASP model?

    I would'nt hold my breath on this new flavor for outsourcing infrastructures. Many a fortue was lost making bets on the ASP model a decade ago. I am not suggesting it will not happen, simply that it's too early to be able to see through all the fog unleashed by the many moving parts.
    There is very little that IBM does that does not carry a premium price. With hardware commoditizing and mananagement and monitoring software getting stanadardized, it might be entirely possible to order off-the-shelf infrastructures at resaonable prices in the next few years...a model with insufficient margins to sustain high-overhead IBMs of the industry.
    I see better prospects for finely-tuned apps-on-tap model a la salesforce.com.
    techknow@...