Point/Counterpoint: Software as a service

How quickly and broadly will IT adopt hosted applications?

EK: OK, I’ll drop the jargon. By “zero deployment” I mean no upfront cost in hardware or software, which you must admit lifts a burden from IT managers who would otherwise have to justify the capital investment. Your main point, though, if I understand it correctly, is that only some kinds of apps — such as CRM or inventory — lend themselves to outsourcing, because there’s little need to customize, whereas many legacy and/or in-house apps are specific to a vertical or to a company’s individual business processes. I agree that these would be last on the list to be delivered as a service. I’m not suggesting a big bang in which you’d outsource everything at once. In general, if homegrown legacy apps work, there’s no need to replace them unless the maintenance costs become unbearable. If you’re in the market for a commercially licensed, server-based software solution, though, you should also consider software as a service. In fact, I submit to you that the lower cost of entry makes the service more attractive than licensed software, provided of course that the service has the features you need.

PJC: In general, I have to agree with that statement, but the model has its weak points. One problem with a thin-client model is that it’s usually predicated on easy access to “fat pipes” — the fast network connections that we take for granted in the office. Decent network access is still an issue for people in the field, and for many businesses these folks are the moneymakers. Security is still an issue for me: Why is an application that relies upon a fundamentally flawed tool — that’s Internet Explorer if you haven’t figured it out already — better than a fat client that isn’t a target for every pimply faced youth who thinks he’s the next king of the VXers? But back to your point: Of course IT managers should be looking at hosted solutions, but they have to be looked at as a means to an end, not the end itself.

EK: Technology as an end in itself? Nah, that’s for you guys in the lab coats. Look, I actually think your security argument is making my point: IE is a problem for most Web apps, not just the subset we’re calling software as a service. And when it comes to enterprise software, homegrown or shrink-wrapped, Web apps rule because deployment is so much easier. The security problem isn’t going to be any worse with software as a service. I guess some applications should remain client/ser-ver based, but even the ERP vendors have gone to browser-based clients. As for network access, your folks in the field will have that narrow-pipe problem whether they’re logging into the company VPN or into a hosted service. But we haven’t really touched on one of the most compelling aspects of the technology: The ability for customers to customize hosted applications “safely,” in a controlled remote environment, so that those modifications don’t break new versions of the hosted application. That’s been a huge stumbling block for enterprise apps. Hosted services like Salesforce.com’s sforce are finally solving the problem.