Who will customers by applications from? You, or the phone company?

November 10, 2005, 09:25 AM —  ITworld.com — 

Microsoft's Bill Gates looks up to Salesforce.com's Marc Benioff. Well, everyone does; Benioff stands about 6'8" and greets you with an outstretched hand the size of a Pontiac. But Gates isn't just looking up, he's looking over his shoulder.

And with good reason. Companies like Salesforce.com, RightNow, and others are threatening the Microsoft crown jewels, the revenue stream (it's really more like a raging torrent) generated by traditionally licensed, locally installed software applications.

You know Salesforce.com. It delivers on-demand CRM services. No servers to buy, no software to install, no more ports added to the corporate network, no additional network administrators to hire. This is all a hosted subscriber service. It's like the tap water in your kitchen sink. It's there when you want it and you don't have to do much to get it. It killed Siebel.

Microsoft is concerned. It wants to lead, not follow. But can you remember the last time it has? Apple had a commercially viable operating system first (Apple II among other things). It was first with the GUI (Lisa, not the Mac, with a bow to Xerox PARC). Netscape jump started the everybody-into-the-pool Internet age. Google is the search king. Yahoo taught us about portals. Think instant messaging and you think AOL. Telephoning with Skype is all the rage. And now the age of subscription-based software services is upon us. And Microsoft is in danger of missing the bus --- again.

Gates years ago acknowledged that he didn't see the Internet coming, that it was senior vice presidents (Chris Peters, Pete Higgins, Bob Muglia and some others, if my memory is accurate) who convinced him of the coming revolution. They saved the company. The outcome a decade ago was Bill's famous memo that repositioned Microsoft for the ensuing Internet battle. The miracle was how quickly Microsoft got religion, like turning a battleship on a dime.

Well, here we are again, but this time it's all about "Web Services." In his Oct. 30 message to top company executives, Gates acknowledges the new wave of competitive threats, prodding them to act "quickly and decisively."

"The broad and rich foundation of the internet will unleash a 'services wave' of applications and experiences available instantly over the internet to millions of users," he writes. "Services designed to scale to tens or hundreds of millions will dramatically change the nature and cost of solutions deliverable to enterprises or small businesses."

Gates acknowledges that the coming services wave will be "very disruptive." That's certainly true, and not just for Microsoft. This fundamental shift in how customers acquire, use, and pay for services will impact every reseller, every integrator, every developer.

Sign up for ITworld's Daily newsletter
Follow ITworld on Twitter @IT_world

I like it!
Post a comment
The content of this field is kept private and will not be shown publicly.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.
peer-to-peer

Esther Schindler
If the comments are ugly, the code is ugly

claird
SVG a graphics format for 21st century

pasmith
Take Chrome OS for a test spin

Sandra Henry-Stocker
Solaris Tip: Have Your Files Changed Since Installation?

sjvn
64-bits of protection?

jfruh
Android fragments vs. the iPhone monolith

mikelgan
What Gizmodo missed about the Pro WX Wireless USB disk drive

 

Sidekick: The Good News & the Bad News
Either way you look at it Microsoft Data Center management did not follow standards or best practices in this failure. In which case it makes me wonder more about the outsourcing of corporate data much less personal data.
- mburton325

Join the conversation here

The Daily Tip

The Daily TipQuick, practical advice for IT pros. Made fresh daily.

Hot tips:

Want to cash in on your IT savvy? Send your tip to tips@itworld.com. If we post it, we'll send you a $25 Amazon e-gift card.

Newsletters

Subscribe to ITWORLD TODAY and receive the latest IT news and analysis.

I would like to receive offers via email from ITworld partners.
By clicking submit you agree to the terms and conditions outlined in ITworld's privacy policy.
Featured Sponsor

AISO founders envisioned a Web hosting company that was environmentally friendly. While the company employed energy-efficient innovations like solar panels, its infrastructure produced unacceptable power and cooling requirements. Find out how AISO leveraged AMD technology to overcome their challenge in this case study white paper.

In this whitepaper, Scalar explores the opportunity to change the landscape with respect to mission critical databases built around Oracle. Leveraging technologies such as Linux, high-end commodity processing power and Oracle RAC technology to architect, design, build and maintain database infrastructure that delivers maximum availability, reliability and performance at a fraction of traditional cost.

On a typical day, weather.com, the Web site for The Weather Channel in Atlanta, serves up between 15 million and 20 million page views. But in September 2004, when back-to-back hurricanes ransacked Florida, the peak traffic on one day more than tripled: over 70 million page views by more than 7 million unique visitors. Read the full success story now.

Marketplace