Cliff Bell knows just where his cell phone is likely to lose its signal as he changes routes to avoid a Bay Area traffic jam, which makes for a handy metaphor as he discusses software as a service. "Yeah, sure," he says, when asked if a thin client and a fat pipe are all a company needs to run applications on demand. "And all you need is love, too." Then his phone cuts out, right on cue.
Bell is hardly a skeptic when it comes to software services over the Internet. He's the chief information officer at Phoenix Technologies Ltd., a Milpitas, Calif.-based vendor of core system software, with $100 million in 2005 sales. In fact, customer relationship management software, from service provider Salesforce.com, is one of the applications Phoenix uses most. "How software is delivered to me is less a concern than whether it meets my needs," Bell says when he calls back. "I can't think of any application I would not use as a service."
But Bell knows firsthand that the transition to software services will not be effortless for technology managers, as applications on demand finally penetrate the enterprise. After more than three years as a Salesforce.com customer, and a more recent move to Voice-over-IP telecommunications services from AT&T Corp., Bell says that CIOs in the services era will face their share of problems not only on the technology side but, just as importantly, in dealing with the cultural changes these services will bring to every organization.
"Software as a service is going to have a great run, but there is an adoption curve, an adoption challenge in the enterprise," he says. "CIOs have to look for the early adopters and the obvious value propositions within their own companies, but until they find them, it can be a tough sell."
As it turns out, the long-held concerns about software servicessuch as downtime and data securityare not the really big issues. More pressing: Suddenly business users can make their own decisions about features and adoption schedules, leaving IT scrambling to catch up on integration and support. The whole lengthy cycle of software projects is now on Internet time, and woe to the CIO who fails to keep up.
And running applications on demand is only part of the challenge ahead for CIOs as companies move into the next phase of the Internet. Newer tools just now making their way into large corporationssuch as blogs, podcasts, wikis and RSS feedswill require special care and feeding, too. These trendy technologies, sometimes lumped together under the rubric "Web 2.0," draw much of their power from their ease of use and a do-it-yourself ethic, much like software as a service. That doesn't mean, however, that they're ready for prime time, or that introducing and managing them will be headache-free for the IT department.
Read Ziff Davis' Stephen Bryant's Five Reasons Web 2.0 and Enterprises Don't Mix
In short, the next wave of the Web is upon us. Companies have adapted to the Internet in a variety of ways over the last decade, from electronic commerce to instant messaging, but the new Web services and applications will require yet another round of adjustments. That includes a little more technical muscle than some users may expect, and a lot of changes in the way IT and business units work together.