There’s two competing paradigms that are going to define the market for the future: web-based Software as a Service (SaaS), and its nemesis, old software industry styled computing as a service (CaaS).
SaaS relies on you buying the OS or installing a free one, ditto for browser, and then using your applications online. Problems include: portability of your data, privacy, control of your data and its removal, the unreliablity of internet connections, and the unreliablity of browsers. Advantages: it’s free, no IT department controls it, and someone else updates it. Google is the champion of this paradigm.
CaaS takes the current computing paradigm, in which you buy a computer, buy or download an OS or software, and maintain it yourself (or have an IT department do it if your business is big enough) and makes it subscription based. Somewhat realistically, it insists on this being a pay service, which as the internet ad bonanza begins to fade, seems sensible. Problems include: what happens if you don’t keep up your subscription, unreliability of network software delivery, large companies like MSFT having knowledge of what’s on your computer. Advantages: your software stays current, you can buy additional software and services from a trusted vendor, you know what your patch level is. Old software — MSFT, Adobe, even Apple — are the champions of this paradigm.
My suggestion is a hybrid form of the CaaS model: people own software they buy, but subscriptions keep it up to date, and OS vendors like Microsoft sell software by other vendors in the subscription form. This will require MSFT make a pledge to ignore piracy, but that’s a sensible vision anyway. HCaaS — hybrid CaaS — as I define it fits into the new media model:
The way to make money in the world of PC gaming, according to Wardell, is to make sure many systems can play your games, while continuing to make them attractive. Find a market where people want to buy and support the games, and don’t go by what the magazines and the blogs seem to think are the big name titles. Don’t let people who aren’t your audience control the titles you make, and ignore piracy. This is much like Trent Reznor’s strategy, although the execution is different. Instead of worrying about pirates, just leave the content out in the open. The market Reznor plays to will still buy the music; he’s simply stopped worrying about the pirates. He came to the same conclusion: they weren’t customers, they might never be customers, so spending money to try to stop them serves no purpose. ^
It’s a bigger win for the customers and software companies alike. The customers get what they always have, and then the ability to keep software alive via subscription, making it cheaper to update and reducing the per-year cost over a five-year period. The software companies gain a long tail advantage, which is that they can sell additional services and software, including ones they did not create. That’s the ultimate marketing win: take a cut for doing next to nothing.
Microsoft could expand into a software marketplace that tracks subscriptions, and makes backup/restore points it stores in an Iron Mountain-style backup system. When your computer goes down, and you put in a new hard drive, you go to one web site and log in with one password, and download and re-install all of your software, both free and paid, in one gesture. Maybe they charge you for bandwidth. Compared to the hours restoring software from backups, is it significant?
We’re seeing a consolidation of the market now because everyone now owns a computer, and they’re all powerful enough to not need upgrading. Instead, the software battle becomes a fight waged from the position of dominance. Now that we’ve standardized, we need to find out which software works well and repulses viruses the best. Software companies are scrambling to respond, and these two paradigms are the general theories they’re using to wage such warfare.
[...] in the arts. Quite simply, Microsoft has Linux and Apple beat in this regard, and only if they screw up and follow the dying trend of SaaS will they fail at this. The negative FUD (fear, uncertainty, despair) over Windows Vista is also [...]