Magazine article New Zealand Management

New Model Ready for Delivery

Magazine article New Zealand Management

New Model Ready for Delivery

Article excerpt

You may recall last month's column referring to the 'Live Era' software phenomenon being introduced by Microsoft. Well, as 2006 gets under way, such is the potential of the on-demand delivery method for business software, this whole sector deserves further investigation--particularly for mid-sized companies that are looking for faster and easier application deployment, investment savings (up to 50 percent or more), and fewer headaches all round.

One of the leading proponents of the on-demand delivery method is Greg Gianforte, entrepreneur and founder of Montana-based RightNow Technologies--recently named a top five worldwide software on-demand vendor by global ICT analyst IDC.

In New Zealand outsourcing specialist Datamail is the Right Now agent--and local customers include such heavyweights as Telecom, Vodafone, the Automobile Association, NZ Post, Air New Zealand, the Immigration Service and Victoria University. Its products are focused on customer service and include customer relationship management solutions, as well as sales force and marketing automation applications.

But first a little history. The first generation of on-demand software came under the heading of 'asp' (application service provider) in the 1990s, which essentially involved a "third party host company taking someone else's software and running it on their behalf", in the words of Gianforte.

This middleman approach offered no economies of scale as it was based on using one rack of hardware per customer (ie 'single tenancy') and largely fell from grace over time.

Today's second generation on-demand ('multi-tenancy hosted delivery') product has been built from the ground up, says Gianforte. "It's a new kind of software built from scratch for multi-tenancy, and it gives the ability of software for thousands of customers to share the same rack of hardware, and therefore eliminate IT infrastructure costs."

It also means that the software development and delivery to customers is now totally integrated.

The traditional model involved companies buying software packages and then taking six months to a year getting everything operational--including buying the hardware, database, IT consultant and training staff.

To demonstrate the deployment speed of the new on-demand delivery model, Gianforte points to a 1600-seat implementation of RightNow customer service software in a major company in the US that had the new system up and running in just 45 days. …

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