Saturday, September 19, 2009

IBM On-Demand Services is Timely

IBM On-Demand services is a timely introduction. They are the company that defined the era we live in with the introduction of the IBM Personal Computer in 1981. They will work vigorous wreckage on the Microsoft, Sun and Oracle with this new foray into on demand services, defining the next era. IBM (2009, p 1) says the world is “Instrumented. Interconnected. Intelligent.” And that these on demand services are “Inevitable.” They report that there are now 1 billion transistors per human. Over a trillion things are networked. All those things have intelligent devices in them. “The time is right now.“ Who better to define the next era than the one who has been defining next eras for over a century.

You could look at On-Demand Services as outsourcing your IT function and keeping the backoffice part of it off-premise. This saves you the costs of the network (replaced by Infrasturcture as a Service or IaaS), server computers (replaced by Platform as a Service or PaaS), and software (Software as a Service or SaaS), and the people who maintain them. You pay for what you use, like the electric utility. It is a boon to small businesses because they might gain access to automation services they could not otherwise afford.

The pieces are already offered: GoogleDocs is an example of SaaS. So is the On-Demand CRM service discussed in the Carlson Marketing (2007, p 2) article. They reported that an On-Demand service that has already proven successful is Customer Relationship Marketing. All businesses need it and small businesses may consider it a luxury because of the cost and difficulty of implementing traditional solutions (see Doyle and Martin, 2003, p. 1). Amazon offers IaaS and PaaS with service level commitments.

The leaders are IBM and AT&T, according to Leong and Chamberlain (2009, pp 1-2), in a Gartner Magic Quadrant. Amazon and Google are niche players now. Even though Ray Ozzie is the visionary who invented Lotus Notes and sees cloud computing as the future, Microsoft is not considered even a niche player. They are trying to fight the trend with what they call Software Plus Services. In other words, you still pay for the software license up front and then again as you use it. According to Wainwright, the Microsoft Azure effort at cloud computing is really a defensive effort to offer a .NET version of the cloud to keep exisiting customers in the fold.

Here's an example of MS Software Plus Service he gives:

"A Microsoft spokesperson told me that customers will need to buy a SharePoint server, which ranges from $4,400 plus CALs, or $41,000 all CALs included, if they want to share documents using the online version of Office 2010."
$41,000 to get what Google offers for free with Google Docs, not to mention the pounding the prospects will take in buying Office. Azure only makes sense if you are an existing MS customer and already own the licenses.

Carlson Marketing (2007). No More Limits: On Demand CRM Goes Strategic. Oracle. Retrieved on September 17, 2009 from WVU IMC 626 Week 3 Readings.

Doyle, M., Starr D., and R. Martin (2003). Salesnet: Change or Die. Retrieved on September 4, 2009 from WVU IMC 626 Week Three Readings.

Leong, Lydia and Ted Chamberlin (July 2, 2009). Magic Quadrant for Web Hosting and Hosted Cloud System Infrastructure Services (On Demand). Gartner Research, ID G00168687. Also, retrieved on September 16, 2009 from

Wainwright, Phil July 20, 2009). Assessing Microsoft’s Cloud Intentions. EBiz. Retrieved on September 16, 2009 from

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