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« Layoffs at Siebel last Friday | Main | CoComment »

Feb 06, 2006


Zoli Erdos

Jeff, I agree with most of your points, including the two ends of the spectrum, except one bit: On one end of the spectrum are those that argue that all software should be delivered as a service by a third party who provides that service as some kind of subscription licensing model.
Isn't that the ASP model of the late 90's that failed spectacularly? I think if you replace third party with the software vendor, you're much closer to the model that works today.

Zoli Erdos

oops, it's little less readable, I lost the html for emphasis.


I think the big difference between the Corio's of the world (which still end up getting sold for a pretty tidy sum) and the's of today is multi-tenancy. This single innovation introduces economics that appear to make the on-demand hosted model economically viable.

Dennis Howlett

I don't agree with large parts of this analysis. But on one thing I think we are agreed - multi-mode delivery. This needs to be worked out according to individual requirements rather than at the behest of the software vendor's preferred licensing model. That's a mega challenge for the industry.


Can you tell me what you don't agree with?

Zoli Erdos


Back then I was with a SAP-focused SI which experimented with the ASP model (the term did not exist). What made it economically unviable as a third party, we were perceievded to be the all-in-one ASP. In that concept we'd have to install, train people to support a bunch of other systems the customers used along with SAP, since the expectation came all from one source. You can't do that unless you already are scaled up, but you won't scale up without it - catch 22. I think THAT killed independent ASP's and that's why the Software vendor becoming the ASP itself (OK, I know, we call it SaaS now...) is a viable model.

(Now I wonder if I have to coCo this again - my guess is not, since it's already monitoring this thread)


The late 90's ASP's were in an untenable position IMO, not only did they not get any breathing space from vendors but they had to deal with the complexity of applications not designed for that type of implementation.

I suspect you would agree that today's multi-tenant hosted apps are radically less complicated than what you dealt with then.

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