Synopsis:
Do you know what is the real cost of your software? Before you reach for a calculator, be forewarned that its a trick question. Even technology industry analysts and seasoned IT executives have difficulty putting a hard figure on the Total Cost of Ownership (TCO) of today's enterprise application solutions. What makes the equation so tricky is the sheer number of variables that must be factored in, many of which cannot be lined up in a neat column and reconciled, such as issues of security, availability, performance, problem resolution and change management. The End of Software: Transforming Your Business for the On Demand Future, by Dr. Timothy Chou, is a ground breaking book for business managers and executives that challenges conventional approaches to business software, and proposes new alternatives to managing and maintaining the systems that companies depend on.

So, of course, the book title doesn't really reflect the content of the book. What Dr Chou has done is to direct his book at the non-technical reader, i.e. Company Directors and their ilk. Chou cites that companies already pay massive costs in maintaining software. There are annual licensing fees and wages for sysadmins who have to install patches and upgrades. He points out that "Ownership" of software is not really a literal term. With more than 75% of IT budgets going just to maintain existing systems and software this leaves little room for innovation. Even radical cost-saving techniques can't fix the underlying problem, so Chou says "the way we use, create, maintain, sell, deliver, and service software has to change".

What Chou advocates instead is a utility like approach and in so doing challenges certain conventions long held by the software industry. And, he has good reason to promote this, as he is the President of Oracle On Demand, an application business that provides applications on demand for users worldwide.

So what exactly is Dr Chou proposing ... he is proposing that the user essentially rents the software on an on-demand basis. The client can obtain the latest version by either downloading or running it directly from the vendor's server. There would be no need for "service packs" or "patches, because if the software runs on the vendor's server, then that problem is alleviated.

The downside? One problem with a distributed computing model is that it will require all vendors to have very tight security on their servers and connections. It would only take a small amount of downtime or a major security breach to convince many customers that they prefer to have the software on their machines.

The upside? It costs less money (it is expected that this be the case) AND all updates and routine "fixes" are done on the vendor's server ... client's don't have to download a patch or an update. Alot of IT people live in absolute terror of patches and updates and in fact put off the inevitable in fear of system downtime and user complaints.

It seems as if I've given the plot away but I haven't really, as the book is brimming with personal annecdotes and industry stories. This is an interesting book, well worth reading if you are in the IT department of a middle sized business. It clearly explains the advantages of the outsourcing business model. Definitely one for your library shelf.