SaaS and Appliances
Want to be able to use Google to search your corporate intranet? You can sign up with it as a service, letting its spiders crawl over your side. Or you can buy their hardware. So the product range takes an interesting leap from a remote hosted service, to a piece of rack hardware.
Noticeably missing is the middle-ground of shrink-wrap software to be installed on your own hardware. This is a significant departure from the way software used to be sold.
This is the end-game of hardware commoditization at work. Against the price of developing and marketing software, the cost of hosting the app in some off-the-shelf hardware is pretty minor.
Compare the cost of hardware against that of installation support. Imagine if there was an installable “Google Intranet Search” product, designed to go onto a server run by the IT department. Well, first off, there would have to be a version for Windows, because some companies are Microsoft-only shops. That means at least two platforms to support. And then, now matter how fast and easy installation was, there would be a deluge of installation support calls coming in, because someone has the wrong version of the operating system, weird hardware or a conflicting application. This can get expensive.
The alternative is simply to bundle a computer with the software. This guarantees that the software is always installed on an appropriate operating system, with the appropriate hardware. It also dances around IT Department requirements for tech stacks, such as “we only support Microsoft”. Generally with appliances the operating system is hidden away from view (it’s usually Linux, but it doesn’t matter). The IT Department is simply told – “there is no operating system for you to support – just turn on the box and run the setup wizard”.
Put this together with software as a service (SaaS) and you have a pretty good offering. You can offer your app in basic, pro and enterprise flavors, or you send them a box. The software vendor doesn’t waste nearly as much time with installation support and the customer doesn’t have to maintain the software.