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The future is on-demand software

By Rick Faulk, Network World
February 13, 2006 12:03 AM ET

Network World - Today's business environment is becoming more distributed; every day we see the need for and acceptance of a dispersed workplace - one where offices, workers, partners and customers are spread worldwide.

Until now, much of business has been conducted at the physical office; however, work is quickly becoming more "atomized" and distributed among loosely coupled global communities of workers. As this trend continues, more business will happen on the network outside the confines of a company's firewall.

Tomorrow's business challenge will be how to work across dispersed environments to stay connected and work seamlessly with anyone, from anywhere instantaneously. To keep pace with the evolving workplace, software vendors will need to be more nimble and prepared to adopt new ways of delivering value to customers.

As 2005 concluded, many in the industry made predictions about the direction software will be taking over the next few years. Trends such as ad-supported business applications, the viability of on-demand software and the potential demise of the traditional on-premise client/server delivery model all took center stage.

However, the future of the software market will not only be about how software is supported and delivered, but about how it can make critical information more accessible and useable for tomorrow's knowledge workers.

Accessibility to critical business applications - at any time, anywhere - has been the battle cry of on-demand vendors for many years. On-demand services can be accessed entirely online, paid for on a low monthly basis, and require no maintenance or support. Most importantly, these applications provide a common framework to bring knowledge workers together, whether it's a co-worker in the next cubicle or a partner halfway around the world.

The on-demand business model is quickly gaining traction among organizations of all sizes. For example, according to IDC's recent report, "U.S. Software On-Demand Delivery Model 2005-2009 Forecast," customers are becoming more comfortable with the model. The report indicates that, "the cost-savings benefits surrounding software delivered on-demand have resonated with the marketplace and customers are now looking at on-demand delivery of software to help increase employee productivity and efficiency within customer organizations."

In addition, an earlier IDC survey on software as a service found that nearly 79% of businesses have or have considered using on-demand applications; this clearly demonstrates the increased interest in, and viability of, the on-demand delivery model.

However, as businesses adopt on-demand software and realize the cost and productivity benefits it brings to their organizations, there will be a new challenge. Those who begin to use on-demand software for all of their business applications will become weary of jumping from one application to the other to access the data they need. For example, a worker who uses on-demand CRM software, collaboration software, Web conferencing software and human-capital-management software, will find he has to move in and out of different environments to perform different tasks.

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