Screaming Penguin - Source Does Matter

Personally I think software as a service is a great concept. Even at that I still think its complicated and it will be very difficult to make it "work" as a business for traditional software.

I think it makes a ton more sense to have software not on the local machine but rather on the network and access it when needed. That said I also would not buy it myself in most cases. I want control of my stuff, etc, and I dont even generally buy *any* software, but I think people like myself are the exception (and I dont steal software either, for the record I try to find alternatives that are free and legal, ala many open source products).

Also, when I say "traditional software as a service" I mean delivering software that is used for normal home or office work and doesnt have an existing "online" requirement over the network and having people pay for access to it (either per use or per time period, etc). Some software already works as a service no doubt, but its not traditional stuff. The Mac network, AOL users that use the damn "keywords", the Lexus Nexus legal network, etc, etc, etc. But in a more mainstream, traditional, sense such as delivery of Microsoft Office as a service it has failed.

Tim Oreilly has an interesting article (linked) that details the failure of Office as a service. I think Oreilly misses the point in his examples of existing services based software (ISPs, AIM, MSN - the ISP thing is access to the network not generally to software and not to any IP stack? and the messenger things are not pay services people would not use them if they cost money) but at the same time he gets the overall picture very well.

The overall picture being that software as a service can certainly work but it depends on the software. IF the software has some online or extra component then people will pay for that service. However, consumers are not into paying for Word as a service, thats already there, it always has been, it doesnt equate to pay for it as you use it. The traditional market still makes sense but will be tough to crack.

See the linked article for more.   Software as a Service Alive and Well: Oreilly