Software as Service

Adam Bosworth writes:

About 9 years ago it became clear to me that, all things being equal, the current model of building software for a specific API to be deployed on someone’s desk was going to be far less sucessful than the model of deploying a service. Why so?

Things that breed rapidly more quickly adopt through natural selection to a changing environment. Services can typically deploy changes every month or even more rapidly because they only have one single configuration on a set of machines whose OS, storage and networking they totally control and which they manage in their data centers.

Secondly there is the telling point of usability. In February 1997, fresh from having built/designed DHTML for MSFT and just before building XML, I made a month long pilgrimage to talk to users about the forthcoming IE 4.0 and what should go into IE 5.0. The results were eye opening to me. Customers, almost unanimously, told me that they didn’t want the rich user interface of GUI for most applications.For office worker Personal productivity applications, sure. But in general, they wanted the easiest most self evident user interface possible. Why? Customer support costs. They had found empirically that the training and support costs for web based applications were much lower than for custom built Windows applications.

In short, services not only evolve far more rapidly to meet customer needs, they are much cheaper to manage for most customers.

Perhaps more importantly, as I said in a prior post, most of the value today is coming from the community, the reputation, the access to information and goods and services, and the media itself. This ineluctable fact coupled with the driving forces of much faster evolution in response to the natural selection of market needs, much cheaper and easier and more simple user interface, and much better ability to know what can be done better for the customer are all combining. Services will be the dominant model.

Google’s Business Model

Dan Gillmor writes:

Consider the new breed of advertiser in the online world. Google’s text ads, which pop up after someone searches using keywords, cost in most cases a small fraction of what it would cost to advertise in a local newspaper or broadcast outlet.

In other words, Google and the other companies in this space are attracting ads from businesses — including businesses that are as small as one person in a home office — that in many cases never advertised before.

The potential for this is larger than most people have recognized. In theory, the Net-based advertising market is almost unlimited — extending to any one person with any one thing to sell.

Google will have all kinds of company in this expanding world of advertising. That will include, I would expect, many of the more traditional media companies that will see a chance to expand their advertising base beyond the equivalent of the blockbuster (expensive) model that now prevails.

The competitors will also include big companies that have already shown an appreciation of Net-based economics. Microsoft, Yahoo, eBay and at least a few others will certainly be among them.

Google will also find competitors, small ones, out at the edges. And some of those will be new entrants that are figuring out ways to create targeted advertising without massively centralized infrastructures. The principles of peer-to-peer file-sharing will come to the ad marketplace, too.

Google is unquestionably positioning itself in a smart way. The critical mass it’s creating may even prove unbeatable, or turn into a new kind of monopoly that sucks up an astonishing portion of all advertising dollars into its corporate coffers. (That would be a dangerous dominance if it happened.)

Today, eBay, online classified-ad sites and traditional media are the marketplace of choice for the single-item seller. Ultimately, Google and others could even go after that market.

How many dollars (and euros, yen, pesos, renmimbi, etc.) will there turn out to be in the low-end advertising market? It’s a big, big number.

What’s interesting about it is the point that Google essentially focused on the non-consumers of advertising – it was a “disruptive innovation.”

Broadband Technologies

Nathan Davison discusses various broadband technologies: BPL, 802.16 “WiMax” Wireless, Fiber to the Home, “Stratellite” Broadband and ADSL2/ADSL2+. The conclusion: “When it comes down to it, each technology is racing towards the finish line, with the winner defined as the first technology that can adequately deliver speedy, cost effective and easily accessible broadband. Even if such a technology can be implemented widespread, it is likely we’ll keep seeing more and more methods to truly blanket as much of the world as possible. After all, the broadband market is far from its peak, and there is always room for competition wherever physically possible. It is an exciting time for prospective and current broadband users. Even if your high-speed haven isn’t directly in your sight, you can at least rest easy knowing it is only a matter of time.”