Paradigm Shift Isn't About the Client Environment

Q: In your "Software Sector Is Seeing Another Paradigm Shift" column (, you mention that you see a new era emerging. I don't see this happening unless users become less sophisticated or the industry forces PCs with less processing power and less functionality on the unwary consumer. The fact that companies find it cheaper to support and deliver their products online doesn't necessarily mean the mainstream of society is going to want to be harnessed to the Internet and led by application service providers (ASPs) or ISPs. I do see a shift in the computing paradigm to products that install and function equally well on all platforms as the convergence of hardware and software continue. I also expect that mainstream users are going to become more jaded with the Internet and less inclined to spend time on the Web looking for services, patches, and information, which I suspect will reduce the amount of clutter we habitually encounter when trying to use the Internet. Serious providers are going to find that seasoned users return to Web sites more for ease of use and reliability than for fluff. Serious providers will also find that all the flash being served actually reduces the number of seasoned users who browse on their Web sites. Your thoughts?

A: In part, I think you missed my point. I agree this paradigm shift isn't about the client environment. The desktop computer will be a permanent fixture in the foreseeable future. However, what I do see changing is the server environment. I see business executives becoming more jaded in regard to maintaining their own custom servers for such resources as corporate intranets and extranets. In other words, in the coming shift, fewer companies will try to maintain their own corporate data center. This shift will occur not only because of the cost of hardware and software licensing but also because of the challenges in keeping their private network secure and meeting legal requirements.

Instead, I see business executives shifting responsibility for maintaining those resources to third parties. This is where Office Live will succeed in drawing its customer base. In the big picture, centrally managed applications actually fit the same pattern that you see with doesn't replace the desktop computer used by tens of thousands of people. However, it does provide a third party that hosts and secures a central server that these users can use. And isn't alone. Sites such as,, and also provide a central hosted environment with a generic framework that allows minimal customization. The result is that customers can essentially rent space instead of attempting to create and maintain their own custom Web server and site. Customers can even skip the server and work with a hosting provider for a custom Web site.

To a certain extent, Microsoft makes it sound like Office Live is for consumers, but in all honesty, consumers aren't looking for the equivalent of hosted Microsoft SharePoint Portal Server. However, businesses have found SharePoint's sweet spot: a functional intranet/extranet appliance. Being able to have someone else maintain SharePoint Portal Server makes it that much more of an appliance, and paying the equivalent of about $3 per employee for that service is cheap. Let's face it--the environment costs less per employee than Internet service or, more important, a single IT staff member to maintain your own bought and paid for servers and software (which requires a new license every couple years). Therein lies the reason for the big shift.

In regard to what consumers want, I think it differs from what companies want. Consider that Microsoft recently started charging consumers to download a copy of the beta version of Office 2007. Don't believe me? Check out the Download 2007 Microsoft Office System Beta 2 Web site at According to this Web site, Microsoft is now in a "cost recovery" mode for future downloads. However, you can still take a free test drive, which doesn't require you to download or install any products. I can't imagine that it's cheaper to provide a server to run the test drive environment than to download beta copies, yet Microsoft is charging consumers to download beta software, warts and all. I think Microsoft would like to see consumers take on products like Office in a hosted environment, but I agree with you in that I don't think that it's a viable market. We might soon find out.

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