The Future is Services with a Smile

The Future is Services with a Smile


The most important trend to hit the software world in the next five years won't be about bits and bytes, it will be something only a lawyer or accountant could get excited about: the changing relationships between corporate buyers and software vendors.

This will have multiple dimensions, but all with a similar impact: total cost of ownership will go down while customer choice goes up. Not only will customers be able to choose from an increasingly wide range of functionality that can be delivered at a much lower cost, but they also will be able to choose from a wider palette of services, support, maintenance and licensing schemas.

The advent of service-oriented architectures (SOA) will set the stage for much of this change. Once the world of enterprise software is truly service-enabled, and customers have well-designed and highly functional service architectures in place, software development and deployment will be changed forever.

Mass customisation

Today, complex business processes have to be programmed from scratch by an army of high-priced consultants or bought as part of an expensive software suite. But the world of SOAs will let those processes be assembled, in a highly customer-specific manner, from a Lego-like set of existing sub-processes and services. Complex processes will no longer be complex to build and maintain, and the mass-customisation of off-the-shelf business processes will raise productivity significantly.

These service architectures will be at the forefront of the change in the buyer/seller relationship. Software vendors will go from being high-priced caterers, delivering entire ready-to-eat meals, to being grocery stores selling ingredients for an increasingly capable do-it-yourself army of chefs and cooks. As an ingredient seller, the vendor's pricing will reflect the fact that some components are commodities (such as general ledger) and some are highly specialised and very expensive (such as invoice reconciliation for the retail supply chain).

Service and support will change as well, because no single vendor will necessarily take full responsibility for a complex component application that depends on services developed and supported by third parties. If your caterer sends over a bad souffle, you know who to call. If your homemade souffle‚ fails to rise chances are it will be hard to figure out what went wrong and how it should be fixed.

Which brings us to the second reason that the relationship between customer and vendor is about to change forever: software as a service, or on-demand computing and outsourcing. The world of enterprise software is dividing into two basic branches of user mode: strategic, value-added functionality - the kind that differentiates you from your competition; and commodity functionality - the stuff everyone in your industry uses. How software is deployed will follow a similar trajectory: Commodity functionality will be outsourced, whereas value-added functionality will be kept in-house.

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