▼ Catch the 'Onshoring' Wave
By Jim Howard, CEO of CrownPeak Technology
Source: ASPnews.com

The debate about outsourcing tech jobs overseas has become so stormy that it seems to have overshadowed what may be an even larger trend in outsourcing -- outsourcing to application-specific software services firms within the U.S. With the exception of the CRM market, where Salesforce.com has become a well-know burr in the saddle of Siebel and other established CRM vendors, the explosive growth of software services has been comparatively quiet, but may be the real "news" in the outsourcing business.  

The market for on-demand application services is projected to grow from $425 million in 2002 to $2.6 billion in 2007, which represents a compound annual growth rate of 44 percent, according to a May 2003 IDC report. IDC doesn't project how much of that growth will be domestic, but the U.S. and Canada have taken a clear lead in the software services race worldwide, and have an excellent opportunity to develop the leading products and companies in the sector. (Read more...)
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▼ Is this the end of IT as we know it?
By Eric Knorr
Source: ARNnet
 
CEO of US-based hosted integration provider, Grand Central Communications, Halsey Minor, has a powerful message for IT: "In four years ... basically the whole notion of enterprise application software is going to be dead." He believes application functionality will instead be available as hosted, pay-per-use services delivered by companies such as Salesforce.com. Putting his money where his mouth is, Minor has recently launched a $US50 million venture capital fund with his own money to fuel on-demand startups. For its part, Grand Central will handle data and process integration between enterprises and multiple on-demand services.

CEO of Salesforce.com, Marc Benioff, which originated the "no software" marketing campaign - offers a similar view. "Enterprise software is dying out," he said. "Look at companies like IBM, which says things should be delivered on demand, and Oracle saying things should be delivered on demand. Even Siebel, who for years and years said it would never happen, is now saying it has to happen." (Read more...) 0105
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▼ NetSuite's Money-Back Claim Draws Scoffs
By Kimberly Hill
Source: NewsFactor

Now that the software-as-service model is gaining credibility -- and, more to the point, market share — vendors are having to differentiate themselves on grounds other than affordability.

Of course, functionality is one such area, and application service providers (ASPs) have worked hard to show they can deliver sophisticated business processes through a Web-based model. Security is another concern that ASPs have had to address. How can enterprise customers be sure that their proprietary data is safe when housed on someone else's servers?

Now, the issue of uptime has come to the fore. And two ASPs are duking it out over competing claims. NetSuite  has announced a guarantee of 99.5 percent uptime, offering to refund a month's subscription fee to any customer whose service falls short of that goal. (Read more...)
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▼ Wall Street Shifting to On-Demand Model
By Ron Miller and Erin Joyce
Source: internetnews.com

"On-Demand" has been a buzzword in the software industry for a couple of years now, a catch-all phrase to describe the shift to pay-as-you-go computing services and software.

Among investors, however, these providers used to be called "Application Service Providers" before the tech bubble burst and buyers' ASP interest fizzled.

But now Wall Street is gearing up for a second round, with the pending IPO of On-Demand CRM provider Salesforce.com offering a test case for how On-Demand software companies will be received -- and valued.

Merrill Lynch, for one, has also just launched a new On-Demand Index that is designed to help the newfangled ASPs to test the markets again. (Read more...)