Why on-premise SOA technology vendors should move to cloud computing pricing

Move to service-based pricing, I dare you!

Let's face it, there are no guarantees around the success of SOA technology within the enterprise. We pay our million-plus dollars for huge license agreements, prior to one server going online, and then find out after implementation that the technology has fallen short and the project a failure. Sound familiar?

I don't put this on the SOA technology vendors, by the way. In many instances, the SOA architects just did not ask the right questions and testing was not done; when you do that, you get what you deserve. However, if you're looking at this from the SOA architect's point of view, they would say that they have to expend the money when the budget dictates and make specific assumptions that the technology will work as advertised.

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Cloud computing providers offer pay-per-drink pricing; if the technology does not work, you can cancel the service as easy as turning off your power. Thus, cloud computing providers are incentivized to provide good service; otherwise, they'll find their revenue rapidly declining. In essence, they are taking on the risk, not the end-user.

So why not leverage this kind of pricing model for on-premise SOA technology? They only get paid if they deliver the value, and if the value is not there, they are out of the deal. It seems fair to me and very fair to those who have paid for technology that just does not make their SOA work.

Here is the challenge: Any SOA technology vendor out there, who is certain that their technology will drive value within an enterprise SOA, should put your money where your mouth is. Offer service-based pricing as an option, perhaps charging a bit more for the shift in risk. Doing that, you're truly standing behind your technology. Moreover, you will be incentivized to deliver value far into the future.

It will be very telling to see who and does not move in this direction, as service-based pricing becomes more commonplace and cloud computing continues to gain traction.

Copyright © 2009 IDG Communications, Inc.