Hosted applications: software as a service

Running jobs on remote computers was one of the key goals of the funding for ARPANet, the network that preceded the Internet. ARPA wanted the researchers they funded to be able to run jobs on each other's computers. (See this historic paper).

As computer costs fell and millions of computing professionals were trained, in house computing grew much more rapidly than the service bureau business. The Justice Department also forced then-dominant IBM to divest itself of its service bureau business.

Today, nearly all organizations operate their own IT department and either purchase application packages or develop them in-house; however, a trend back to software as a service may be emerging. As network speed and reliability increase, the case for hosted applications improves. Some pros (+) and cons (-) of software as a service are:

• + The application can be run from anywhere, including by mobile workers
• + There are savings in in-house IT infrastructure and personnel
• + The service provider has specialized expertise and skilled employees
• + The software can be continuously upgraded and debugged at no cost
• + The software vendor sees how it is used, and can make improvements using that data
• + Upgrades do not have to be installed on client machines
• + Initial investment by the user is minimized
• ? Operating expense may be greater or less
• ? Reliability and availability may be increased or decreased
• - Intruders may be able to access the application
• - The service might not be as flexible and well tailored as software written in house
• - The service vendors may go out of business
• - The service vendor may alter the service, pricing, etc.
• - Data may be insecure at the vendor's site, particularly if it is out of the country
• - Exporting your data may be difficult or impossible, locking you into the service

Network World asked the question "is on-demand CRM better than an on-premises solution?" and published a short debate. You can read the Yes and No arguments online.

SalesForce.com is an early, successful vendor of software as a service. Company founder Marc Benioff feels hosted software will largely replace user-owned and operated software as networks spread and improve. (Going to an extreme, imagine a future Internet in which your connection to the network is faster than the connection to your hard drive).

Benioff feels hosted software levels the playing field between large and small organizations by enabling them all to use the same cheap, reliable programs. He also encourages outside programmers to use Salesforce.com tools to develop their own hosted applications. Benioff expects most software to move to the service model, and wants his development tools to become the "Visual Studio" of network-hosted applications.

He likens the adoption of his software and development tools by millions of small companies and developers to the long tail concept in retail sales.

The University of Arizona is now using Gmail and plans to use other Google services. ASU IT director Adrian Sannier explains why he made that choice in this blog entry. Sannier feels that consumer applications, not military or business, are now driving innovation.

Some early services:

• use of Web services at the University of Arizona and other organizations
• brief comparisons Information Week
• brief comparisons O'Reilly Associates
• collaborative writing writeboard
• collaborative to-do lists tadalist
• organizer for documents, files, to-do lists, reminders, etc. backpack
• project management basecamp
• word processing writely
• wiki plus ? JotSpot
• spreadsheet numsum
• office suite gooffice
• accounting, ERP, ecommerce, and CRM net suite
• collaboration zimbra
• salesforce.com development tools CustomForce, SForce and MultiForce

• talk by Marc Benioff of Salesforce.com

Note that many of these are AJAX applications and the collaborative applications use RSS to inform team members of changes made by others.