To: Jurgen Trautmann who wrote (5000 ) 1/15/1999 9:59:00 AM From: MonsieurGonzo Read Replies (1) | Respond to of 11051
JT; RE:" Software - Product or Service ? " There is an "internet conference" hosted by the brokerage firm DLJ in San Francisco this week...briefing.com ...several provocative ideas were put forth by the e-tail companies to the WallStreet analysts; eg., reducing cost per connect hour is equivalent to increasing bandwidth ; vertical applications will grow more rapidly (next) because traditional "economy of scale" is not so important on the 'net; popularity of content on the 'Net appears to be Sex, Gambling, Sports, Stocks and News , in that order, etc. Of the many ideas, I was struck by this one... "...License oriented businesses (software) will become service oriented businesses. " ...because it hits home, to my own business: I innovate "industrial processes" and have distributed this intellectual property not unlike "a software product" for the past 25 years. For example, recall the "Bessemer Process" for producing steel. This more cost-effective, clever way of making metal products could be realized by the inventor as a new type of machine , so he could patent the idea and sell new machines (or the design for thereof) to the steel industry, in an age before hardware and software paradigms existed: the model was the Steam Engine back then. My own process involves producing metals too - a more clever way of recycling that creates sufficient margins, payback, etc. for huge-scale, traditional primary metals companies to "make recycling work" and invest/go into the recycling business. But it (my process) wasn't realized as a new machine , rather, it was "a way of dis-assembling and re-assembling scrap metals in such a manner that alloys could be manufactured from what were essentially randomized, mixed-alloy flows coming back to the metal producers from the metal product consumers". 25 years ago, my process (for "how to run an industrial scale recycling operation") was sitting on a DEC-10 mainframe, and I distributed this 'product' via time-sharing to my client companies, and charged them for this service , along with training, maintenance, etc. When I moved to San Francisco in 1980, I crammed this code into microcomputers and sold "instruments" that could be rolled on to the factory floor; my business model changed, and I was in the "industrial instrument" business. But 5 years later, I moved this code again, over to the PC , and licensed a software product. Until recently, the only change was that single-user Licenses were expanded to Site Licenses that consisted of networks of PC's running throughout the plant, rather than a single workstation placed where the metal-making process was directed. I remember that, in 1985, the idea of "Licenses" for intellectual property was still somewhat new; hell - back then, "computers" operated by workers on the plant floor was still a radical idea in many places. Recently I have been moving my code again - over to the internet . In many ways, I feel as if I have come full-circle, for the internet reminds me of time-sharing , at least from the programmer's perspective... though most of the young wizards today have no idea what "time sharing" was like. So, my company will no longer "License" clients to access this intellectual property: we will charge them a monthly usage + maintenance fee and it will run either on the 'Net, or on the customer company's own intra-net . In other words, insofar as my software business is concerned, it is true that "the licensing business" is evolving (back?) into "the service business" model that I started with 25 years ago. We wonder, then - if "ease of universal access" provided by the internet results in dis-possession of software for indivuduals ; ie., in the future will all "software" never be "possessed" by the consumer again - will all software become, then, (de-evolve?) into a "service business" instead ? -Steve