Applications Service Providers May Change Your Life

HWeissfield writes "ZDNet has an interesting article by Jim Seymour concerning the recent advances by ASPs and how this new paradigm of software use could potentially change the way that productivity is created." (More below.)

HWeissfield continues "I saw this as an unsurprising evolution of the way that the Internet is influencing our society today, but I question whether we can really leave critical applications and reports to someone other than ourselves. It may be common to use the terminal paradigm on mainframes where computing power is grandeur and reliable connections can be made, but what about the chaotic and unpredictable mass that is the Internet? Where could Linux fit into this structure that may be prevalent in the future?"

For one thing, it may mean "instant" commercial accounting and tax software for Linux, BSD, BeOS etc. without begging companies that publish such things for ports to your favorite OS. For example, Intuit, publisher of Quicken, Quickbooks, and TurboTax, is reportedly ready to roll out cross-platform, Web-based apps big-time. If they do this - and if their competitors follow them - it'll save a lot of small businesses, from the need to maintain a Windows or Mac box in a corner to run financial software after they've switched to Linux, *BSD or BeOS as their primary OS.

This is a "must read it all the way through" article. It's deep and thoughtful and (as HWeissfield points out) it raises many questions. Care to take a crack at answering some of them?

Interesting concept

Web-based applications aren't "new" - Java was Sun's venture into this line - and they do move in the direction Sun have been anticipating (the "Networked Computer"), but that doesn't make them any less fascinating.

One problem, though - web-based applications are constrained by the limits of HTML as a presentation language. (Now, if web browsers also supported TeX, they'd be awesome! :) The fact is, whilst the web's presentation is inferior to that obtainable by a specialised, locally-running application, the local application will always be the program of choice for the majority of users.

Then, there's the degree of control you have. This affects "geeks" (read: computer hackers) more than "real users". Where's the benefit in supercooling, overclocking your 1GHz Alpha, running Journalled Reiserfs on your home-built RAID array, expanding up to 256 megs high-speed RAM, and running the very latest Enlightenment & Gnome on X11R6.4, if none of this gives you ANY benefit whatsoever? If the application is over the web, your computer is nothing more than a dumb terminal, no matter what you've done.

Lastly, there's a security issue, here. No ISP, AFAIK, is using IPSec, or ESN. No IPSec means no real security in any of your applications, or your data. No reliable authentication. Minimal encryption, if any. No ESN means that unstable applications or web-browsers can cause DoS. Automatic throttling of rogue processes is essential for something like this.

P.S. To those complaining about the lack of a link: If you're looking for a ZDNet article, you might find it best to start at ZDNet's web site, and use their search facility. It's not painful, I promise. And it means the rest of us can get on with discussing more important stuff.

This is...ehh....

I am completely opposed to this approach for a variety of reasons. First off, cpu power is cheap. Period. Secondly, by centralizing such mundane tasks as word processing and office products (as Sun plans to do), the chances of needing to do a simple task and having it unavailable increases exponentially. Even the best ISPs have some downtime on services. Why should I use a centralized (or heaven forbid, web) interface if I just want to type up a report when I can get it done easily and safely on my own? This is a grotesque idea, and one for which there is no need for. Just because something can be done, does it really mean it should?

Looking before I leap

There are a few issues I'd demand to see addressed before I'd willingly switch to a remote application server:

• Backup.
  Local: Oh, damn, I deleted September?!? Hey, Matt, could you pop the September end-of-month DAT in?
  Remote: [hold music while my credit card charge for "advanced services" clears]
• Security. What security model does the service use? Does one root user have access to every user's data? If so, I want that job. Screw insider trading!
• Bandwidth. I'm sorry, but this seems to be glossed over too often. Yeah, I know, we'll all have our own private T-1s next year, and xDSL in our country retreats... Sure. For now, I suspect that the vast majority of personal users are browsing over analog, and I don't know too many businesses ready to upgrade their dual-channel ISDN to a DS-3 so that the secretarial pool can run WordPerfect. I don't care if it does get cheaper - so will the local hardware it would be replacing.
• The Slashdot Effect. Services will make design decisions based on expected average load, not peaks. What happens when I've absolutely, positively, got to have this report finished by noon, but it's final report time at Schmuckitelly University (who's a paid user of the same service)? Can the service (for a premium, even) guarantee that my requests can get a higher priority?
• Liability. What happens when the service deletes September (see above)? You can bet that there will be limited liability clauses left and right, so how far are you willing to trust their assurances?
• Better than local servers? Related to the Bandwidth entry, hardware is getting cheaper just as quickly as bandwidth (except for that $#!(*(%! RAM!). How can a remote server expect to remain as cost-effective as a local one? And how will you feel the first time that a service decides to subsidize their rental income with banner adds across the top of your spreadsheet? And what about when you realize that those banner ads are specifically targeted to whatever spreadsheet you're currently working on?

Maybe I'm wrong; I certainly hope so. But part of my paycheck derives from a healthy sense of paranoia. I just couldn't, in good faith, encourage my employer to jump on this particular bandwagon.

How you make money in the software business

Microsoft (and others) have been trying to figure out a way to improve the revenue stream.

The way the shrink-wrapped world most of us life in goes like this:
The package is sold (cash for producer)
You use the package.

Barring some lame file format changes, or an OS change, if the software worked for you in 1980, and your needs haven't changed, why would you help the software developers bottom line by buying a new version? (And it is possible to run that 3.3 copy of CP/M WordStar :-) ) You can see why, to developers, Microsoft is the company they love to hate. Note too, how among the Macintosh faithful, how the Mac OS allowed older code to run un-modified worked to the Mac's advantage.

The model of a limited time license you need to re-up doesn't work well on the shrink-wrapped PC platform. (Although Microsoft has that as a 2 year site license for businesses using Office 97/98)

The model of charging a yearly maintenance fee is tried by many shrink-wrapped vendors. But, this is used more as a warranty program. In exchange for money, (and evening out our cash flow) we will send you the new software when we make it.

If you try to follow the model of buying the features you need, then the maintenance model doesn't work. And how does the vendor get more money out the users.

Ok, how about the model of a yearly licensing fee? This has not worked, other companies rush in and take your customers, by pointing out how they have a lower cost of ownership. (assuming an infinite ownership time)

Now, what if you charged a company or person every time they used a service (Really, the software)? This model is:
Recession resistant. (if the business cycle takes a downturn, you can't sit out an upgrade cycle, now can you?)
Evens out the cash flow
Simpler to control the licenses and therefore the revenue stream. (harder to pirate)


Remember the stink about how Microsoft was going to rent software? And no one really wanted it? The ASP is just another form of rental.
And a way to provide steady and increased cash flow.