Goodbye, Shrink-Wrap: Software for Rent: ASPs: Tired of Constant Bugs, Costly Upgrades and Bloated Applications? the Computer Industry Thinks It Has the Solution
Sandberg, Jared, Newsweek
John Montz is happiest when his world is in total disrepair. The 47-year-old "building operating-system specialist" at Western Wyoming Community College is a fixer by trade--and by nature. He lovingly works on the school's air-conditioning system. He traps the badgers that burrow into buildings on campus. Montz meets software bugs in his computer--the ones that would make most of us curse like sailors--with the same sense of adventure and delight. It's a day off for him, but he wakes up every Saturday at 5 a.m. to get the latest software fixes and patches and to run performance tests, cleaning his hard drive of any digital jetsam left over from Web surfing. "It is a pain in the a--," Montz admits. "Everything around me is constantly broken. But I like it."
But lately, Montz has been using a Web site called McAfee.com; it's so helpful in maintaining his PC that he can even forgive it for making his life easier. He once bought three separate computer programs that together cost roughly $50 to ensure that his system was up to date, inoculated against viruses and protected against crashes. Now he gets all those services through the Web site for an annual fee of $29.95. Besides money, he saves acres of space on his hard drive. Because McAfee.com has to upgrade only its service, not individual copies of software, Montz doesn't need to install anything.
Most of us respond to the complexity of computing with the kind of dread only dentists, the IRS and Brussels sprouts inspire. But the software makers, who break more promises than campaigning politicians, have teed up yet another big pledge: to take the anguish out of software by offering it for rent. The days of lengthy and torturous installations, relentless bugs and immediate obsolescence will one day, they say, be a repressed memory. Free yourself from the death spiral of hardware and software upgrades. Forget about waiting on hold with customer support, subjected to a bigger lie than pledges of tax cuts: Your call is important to us.
If all goes according to plan in the coming year or so, you could even throw your PC out the window. All you will need is one of the new cheap Internet appliances, such as a digital TV set-top box. Drives for floppy disks or CD-ROMs? Not necessary: you won't be installing anything.
Consumers are not the only ones who will benefit. The business world has been increasingly renting applications instead of buying them, saving the high cost of upgrades, installation and maintenance. The efficiencies of the rental market have led some Wall Street analysts to predict that such software services, or application service providers (ASPs for short), "will be key to the growth of our global economy over the next decade." Traver Gruen-Kennedy, who heads an industry consortium of ASPs, thinks the new purchase method barreling toward the consumer market could lower the cost of computing and "fill the digital divide, increasing the audience for computing."
Software landlords are springing up everywhere. Established brands like Intuit are letting users rent TurboTax online. New entrants such as cMeRun, Media Station and Personable.com team with Internet service providers to lease well-known software titles for flat monthly fees. To boost sales, computer makers are building new "appliances." And companies that provide high-speed Net connections are desperate for anything that gives users reason to upgrade their lines. Earlier this summer Microsoft said it would make all its applications Net-ready for this kind of usage. "We will not be, none of us, delivering software products in 10 years," predicted Microsoft's spring-loaded CEO, Steve Ballmer. "All software products will evolve to be a service."
It's easy to see why companies are so eager to shift their software from shrink-wrap to the service model. The pace of software development is so fast that by the time a product hits store shelves, it's already in need of re-engineering. …