5 Reasons On-Demand is In Demand
Growth
The On-demand software as a service market is growing, and growing fast. A study conducted by research firm IDC predicted that subscription license revenues will be 34% of the total software market by 2008 and over 70% of small to medium businesses are considering implementing some form of Software as a Service. Subscription licensing will see a 16.6% increase while traditional licensing will begin to drop. Many of the major players in the software world, including Microsoft and Oracle, are working on or have already implemented On-demand packages and the trend looks to continue. Adoption by such organizations helps to ensure that On-demand is more of an evolution than a fad.
Cost
Software isn’t cheap and in most companies it’s just a cost center. As companies look to cut their IT costs, application hosting is one of the places they are looking to solve their problem. Companies are much less willing to spend on the resources needed to maintain custom software installed at their location. With low up-front costs and manageable subscription fees, On-demand applications allow companies to save big by greatly reducing the staff, energy, space, and money needed to maintain software.
Quality
Some software packages are ‘fire and forget.’ - the vendor comes in, installs the software and then you may not see them again.. The subscription-based method of On-demand actually enforces quality because a provider has to prove themselves on a regular basis. This leads to better, more pro-active service, regular updating/bug fixing, and more robust tech support. It also gives companies a way out of a bad software deal. If the software isn’t working as intended, companies can pull out with minimal financial or hardware investment.
Access
The office is evolving. Even large companies are starting to see increasing numbers of employees working from home, on the road, and at off-site locations. Future software is all about accessibility to information - at any time, from any where that can get a data connection. As laptops get smaller and mobile devices become more popular, this trend is likely to see huge growth, which traditional systems will have a hard time coping with. Users must be configured with VPN’s, remote access logins, dial-in numbers – all of which cause significant hassle for IT departments. Hosting eliminates many of these problems by providing a common way to access applications without having to get through the company’s external security or install ageing dial-in systems. Hosting truly does allow corporations to adopt a decentralized virtual office approach.
Management
Perhaps the biggest advantage of a hosted implementation is the ease of management. Large mainframes and rows of server racks may be a thing of the past for many companies as they bring outsourced hosting into the fold. The On-demand providers will take the burden of hosting and maintaining the hardware and software, leaving companies with time and energy to focus on their core business instead of their IT. Security management will also be easier as users will have a common way to access applications and information from any computer, any where. Finally, managing users with specialized applications will be easier as those applications will not need installation on new work stations during an office change or equipment move.
