Tapping Into ‘On Demand’

A major shift is underway that is going to make your life a whole lot easier and allow you to use integrated systems that previously were too complex and not worth the effort for the size of your shop.

Most shop owners didn’t open their doors so they could become experts at accounting, property management or information technology. Unfortunately, those are the things that business owners tend to spend their time on instead of running the business. However, a major shift is underway that is going to make your life a whole lot easier and allow you to use integrated systems that previously were too complex and not worth the effort for the size of your shop.

Typically, software comes in a box on a CD that can be installed on your shop’s network. This is typically referred to as “shrink-wrapped” software. Configuring the software and a network is time consuming and requires constant attention. Often, issues arise because new versions of the software are released that need to be installed and configured, hardware breaks that has to be replaced right away, and data must constantly be backed up so nothing is lost in the event of a catastrophe. Not only is it time consuming to maintain shrink-wrapped software, it is also expensive to keep upgrading the software and hardware.

Soon, you will see many applications offered on an on-demand basis via the Internet. There will be no software or hardware to buy or maintain. You will simply open your Internet browser and start using the software. It will be streamed to you on an on-demand basis. This on-demand model is the future of software delivery and is better for everyone except, perhaps, software vendors that miss the boat and don’t transition their software to an on-demand model fast enough.

The revenue model for on-demand software is very different than shrink-wrapped software. With your current software, typically a perpetual license is purchased to use the software and then an annual fee must be paid to get the upgrades. On-demand software on a subscription or pay-per-use basis will be available that will include use of the software, hosting of the software, backups of data and all the upgrades. Upgrades to software will happen fast because the vendor will not have to produce and ship CDs; instead, they will make the new code live on the server, and anyone accessing it will instantly have the latest version.

The benefits to you are many. There will be no software or hardware to buy or maintain, and you will be able to access the system and your data any place that has an Internet connection. Because your software will be online, you will be able to quickly integrate with online software that your customers and suppliers are using.

There are numerous examples of on-demand applications running right now on the Web. For example, when you check your e-mail online, that is an on-demand application that allows you to send and receive e-mail. Microsoft has a version of MS Office software that is available online as an on-demand application. For manufacturers, MFG.com is an on-demand application that brings buyers and suppliers together at the exact moment the buyer has a need and a supplier has the equipment, expertise and capacity to fill that need.

Certain applications that are not very processor intensive soon will be online as an on-demand application. However, it will take a while before you see robust applications, such as CAD or CAM, being delivered as on-demand applications. The limiting factors are Internet bandwidth, and the fact that the software used to develop on-demand applications is still relatively immature. I truly believe it will happen, and it will be in a matter of only a few years. I’m not sure whether to call it an evolution or a revolution, but it will certainly change the face of the software industry, and it will be very good for you as a shop owner.

Mitch Free is president & CEO of MfgQuote.com, Atlanta, Georgia. He can be reached at (770) 444-9686, ext. 2946 or at mfree@mfgquote.com