The return of hosted services

Remember ASPs? Application service providers — essentially rented applications delivered and managed via the Net — were the Next Big Thing four or five years ago. I remember those days well. Back then, I was leading editorial efforts at CNET.com, headed by the charismatic and mercurial Halsey Minor. Minor was on a mission: He believed that the ASP model would overwhelm the conventional boxed-software approach of the day, and he decreed that CNET would cover this market in excruciating detail.

At the time, I questioned lavishing so much editorial attention on ASPs. In retrospect, I believe that Minor was absolutely right; his timing wasn’t. Despite oodles of press coverage and massive vendor hype, most ASPs crashed and burned in the early 2000s; the hosted software model went into suspended animation for at least four years.

Fast-forward to late September 2004. Post-bubble, Minor is now CEO of hosted integration provider Grand Central Communications. He has gathered a clutch of Bay Area tech journalists to spell out his grand plan for the future of high tech. And what do you know? Minor’s vision turns out to be … software delivered as a service. It’s ASPs all over again. Virtually all core IT applications and functionalities (including integration), he insists, will be delivered through a browser and managed, parceled out, even upgraded by a hosted software provider.

As Minor spells out his scenario, he grows increasingly emphatic, almost incantatory, his speech evoking the rhythms of a minister preaching the one real truth. Within a few years, he tells the assembled gathering, Grand Central will have partnerships with virtually every major software company in the world. His company, he says, will be the integration platform of choice for the Fortune 500 and beyond. Software as we know it will be dead.

I stare across the table at InfoWorld Executive Editor Eric Knorr, looking for a possible eye roll. After all, this is grandiose stuff, way over the top. Yet for all his swagger, Minor is onto something. And this time, his timing is pretty good. Not only have Web services and identity management standards matured, but the browser has emerged as a rich front end for apps. Knorr looks back at me and smiles.

Just like that, a cover story is born.

For that story, “Is this the end of IT as we Know it?”, Knorr interviewed Minor, Salesforce.com CEO Marc Benioff, and a slew of analysts, proponents, and critics. Knorr’s driving question: What will it mean for IT if all enterprise software is delivered as a service? Opinions vary. But all parties agree on one point: Software on demand isn’t going away.

Apparently, timing is everything.