Revolution in Increments

Revolution in Increments

Summary: Revolutionary acts need not always end with blood in the streets. That's onelesson fromthe new economy of Webservices.

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TOPICS: Tech Industry
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Revolutionary acts need not always end with blood in the streets. That's onelesson fromthe new economy of Webservices. Whereas the "tech boom"explodedin our faces,the advocates of Web services take a much more pragmatic and incrementalist approach.

Just look at what is happening to the pricing of software. At the recent SoftSummit in Silicon Valley, speakers discussed the emergence of "utility" and "subscription" pricing as a growing alternativeto the conventional model of "perpetual licensing."This is where the IT backlash has led us. While perpetual licenses account for 81% ofsoftware license revenue at present, IDC expects this percentage to fall to66% by2008 as new, risk-reversing and buyer-friendlyoptions proliferate.

We have a ways to go, of course. "Software is back in the Ford era of 'any color as long as it's black,'" contends Jim Geisman, president of Boston-area consulting firm SoftwarePricing.com.

But the progress is unmistakable. "The software market will move toward licensing models and practices that increase the predictability of vendor revenues, make it easier for customers to manage and comply with software license contracts, and clearly establish the business value of software," writes IDC analyst Amy Konary.

Monolithic and intergalactic technology "solutions" -- which demand vast capital investments and carry high levels of risk -- are no longer the only ones on offer. In contrast to the disappointing revolutions of the past, theWeb services revolution will occur in increments.

Topic: Tech Industry

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