I just attended a Computerworld-sponsored conference SaaScon 2008 on software as a service, held in Santa Clara, CA.
The information technology ( IT) industry loves hypes — be they thin-clients, client-server computing, object-oriented databases, ASP, ISP, MSP, xSP, virtualization, Web x.0 (where x = 1, 2, or 3), mashups, cloud computing, social computing — which drive the industry, clients get excited, and the analysts and vendors work each other. The problem with us Americans is that we do not have an emphasis or focus on history, recent or otherwise.
Specific to this conference that focused on software-as-a-service (SaaS), it was amazing to see how many attendees were excited about the concept of SaaS. SaaS is nothing new: Thirty years ago they were called Service Bureaus (remember CDC’s Cybernet?) You submitted a job with punched cards to a computer that was housed who-knows-where, got the results back, fixed any errors, resubmitted your job, and got the final results after a few runs. This was real cloud computing: You had a dumb terminal (a.k.a. green screen), usually a 3270; a computer, usually a mainframe, and a network that you didn’t know what it consisted of. You probably had a TI Silent 700 terminal with thermal paper to input and print out the results, and not a desktop/laptop with lots of memory, disk space, GUI, and a wide-screen monitor. But, you got your work done, although it probably took you longer than it would today.
So, is SaaS going to take over the world? No, but it will play an increasingly significant role. Many defense contractors, banks, and financial-services companies are not big fans of SaaS because of security and privacy issues. Nicolas Carr, of the IT Doesn’t Matter fame, has a new book The Big Switch, where he essentially expounds the concept of utility computing (aka SaaS) that Larry Ellison of Oracle and Scott McNealy of Sun Microsystems talked about over ten years ago. However, Mark Benioff of salesfocre.com actually delivered the solution. Scott even predicted circa 1996 that pretty soon all appliances in your home would be networked and that your light bulbs or fluorescent lights would beg to be replaced before they die. Today, 12 years later, none of the appliances —toaster, microwave oven, refrigerator, freezer, washer or dryer — in my home have an IP address! As the late, great Arthur C. Clarke said decades ago, and I am paraphrasing it, we tend to overestimate the short-term implications and underestimate the long-term implications of a new technology.
New technologies, for the most part, supplement existing ones, and not totally supplant them. We believe SaaS will steal some thunder from the traditional perpetual-licensing model, but will not totally replace it.