Gartner bearish on on-demand services

Gartner bearish on on-demand services

Summary: The growing popularity of software-as-a-service vendors like Salesforce.com, and recent moves, like Oracle's acquisition of Siebel, are indicators that the software industry is tilting toward an on-demand future.

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TOPICS: CXO
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The growing popularity of software-as-a-service vendors like Salesforce.com, and recent moves, like Oracle's acquisition of Siebel, are indicators that the software industry is tilting toward an on-demand future. But don't expect it to take off so fast says a recent Gartner report (client reg. req.).  Despite the hype, on-demand services are likely to account for less than 10 percent of business application use through 2010, according to the research firm. The reason why, says Gartner, is that the on-demand model is not suitable for complex business uses like logistics support and order handling, and for large complex companies requiring business process support.  But the "complexity constraint bar" will rise over time since on-demand vendors can add functionality easily, said the report.  

Among the cases when on-demand services should be considered, according to Gartner, are to; bypass IT when it stands in the way of the business for any number of reasons; serve as a temporary innovation fix if functionality is not available from a large suite vendor; and when the underlying process is outsourced such as call center support applications.

Avoid on-demand services when you are dealing with transactional-intensive applications such as in a warehouse management system; when data is exceptionally sensitive, and when on-demand service providers don’t have the deep functionality or provide the level of customization required, said the report 

Gartner defines business applications on demand as, "the delivery of preconfigured business applications form a remote location over an IP network on a subscription-based outsourcing contract."

Meanwhile, a great angle at how disruptive technologies like on-demand are wreaking havoc on traditional software licensing schemes comes from Infoconomy. A column starts off by quoting Eric Rudder, senior vice president of the Server and Tools Division at Microsoft, as saying "My head hurts...my head hurts a lot when I think about that problem," in response to questions about software licensing at a press briefing in London recently. The ensuing issues covered capture well a situation going seriously pear-shaped…

Topic: CXO

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  • Wrong again ...

    This from the company that in 1988 advised enterprises to upgrade to OS/2 and Microchannel. Gartner's track record on forecasting disruptive technologies speaks for itself.
    phil wainewright
  • Don't look for people to exchange PCs for terminals

    And if proprietory vendors try to eliminate outright sales, look for people to flock to free alternatives in droves.

    People like controlling their computers. That's what drove the PC revolution in the first place and it's not going to change.

    On the other hand, I can easily see corporations replacing personal computers with servers and terminals, but it won't be because the average employee wants it that way.
    John L. Ries