Much has been said in the past year about how the traditional software model is broken. Licensing and pricing must be revamped, outsourcing strategies must be considered, maintenance charges must be watched. Quality must be improved. Security must be a top priority. More-flexible architectures are critical. More consolidation is on the way. Open source is real.
The industry is in the midst of a major transition. Advancements in grid computing, services-oriented architectures, and on-demand software services are gathering serious momentum. Users are extracting value in new, more meaningful ways.
Let's look at the "on-demand" model of software as a service. Those who don't believe in it are in denial, says Halsey Minor, CEO of Grand Central Communications, who has adopted the model for integration services. Salesforce.com understands that; it has been operating this way since day one. Siebel Systems seemed to be in denial for a while but has seen a sizable increase in its CRM on-demand software after turbocharging its focus in the fourth quarter. Oracle CEO Larry Ellison says, "At some point it will become conventional wisdom to buy online" software services.
Let's look at grid computing. It isn't quite the holy grail that Bill Gates said it would be--yet. But companies such as Johnson & Johnson are finding dramatic results (see story, "Slow Going On The Global Grid").
Let's look at service-oriented architectures, an undeniable innovation. If you're looking for a killer app for 2005, you may not find a specific one, but SOAs will probably lead your business to one.
In the coming weeks, we'll continue to explore the future of software, looking in-depth at wireless apps, enterprise search technologies, and more. Stay tuned.