Amen to the hype

Let's start by getting the hype out of on-demand for a bit. Really, its just a distribution method built on top of the internet. It covers several big sectors of the economy - software, media, entertainment, telecom, education. Some of these sectors have had far reaching distribution models even before on-demand came along. Like media, entertainment and telecom for example. They've always reached out to millions of consumers through traditional distribution channels like grocery stores and mail (for printed media), air waves (radio and TV), and wire (telephones, cable). So on-demand models like online gaming, iTunes, pay-per-view TV, even VoIP, are simply another step in lowering the cost of distribution a notch further. Distribution over the internet expands the addressable market in each case, can even allow a vendor to start serving a global market if they so wish, but it really is'nt that big a deal.

As for education, specially the basic kind i.e primary and advanced schooling, its value lies in its life experience. Internet distribution would take away a good part of that. At most, it can supplement it some bit. Like when you goof off in a class, and catch up on the internet. But who'd ever want their kids to graduate from an internet high school or university?

But think about software. Here is an industry where so far there have been essentially two thriving worlds, but both quite far apart. There was the shrink-wrapped world of mass distributed software, perfected by Microsoft, that placed wonderful affordable tools like MS Office on millions of desktops in homes and offices. But it really was personal software. And then there was the elite world of enterprise software that costs from hundreds of thousands to millions of dollars. It addressed a market of 10,000, at most 20,000 of the biggest, richest companies. But where did that leave literally millions of companies bigger than a single-person shop and smaller than those fortunate 10 or 20 thousand? ...in a dark, dark world in between.

And then light shone on that empty space. Along comes on-demand software distribution. With it, more or less the same kinds of software that have hitherto been used by the big, rich companies to run their vast organizations is becoming available to every little business owner. Now that, in my opinion, is where on-demand deserves its hype. Because it is changing the game. It signifies the democratization of enterprise software. For the business software industry on the one hand, it creates a disruption by sharply reducing the cost of software distribution and delivery for new entrants. More significantly, for small business owners of any type who are right now discovering on-demand software, it opens up a bright blue sky of possibility. Business owners can now win back their precious time from several of the mundane headaches of running a business, and can again start to dream big. And I work for Oracle, but don't want to sound condescending here, because I did come here more recently from the SMB world.

But think about this. Small business owners can now begin to run their businesses - their accounting, sales, marketing, customer service, inventory, billing, payroll, employee expenses, webstore, collections, projects, email - almost the whole shebang, with business software that in several cases actually even ties into each other. And if it does'nt quite well yet, even the big businesses struggle with that sort of thing all the time :) Small business owners don't need to buy complicated hardware and software gear. Don't need to hire IT people. Don't need to worry about making techie things work. Just work on the things they love doing that made them start their business in the first place.

Think about how cool that is for a business owner. They've always had lower overheads than big business. They now have easy, affordable accessibility to powerful technology to run their business. Just the right passion to deliver a product or service that their customer wants, the sort of passion that can often be missing in the way large organizations work, and that business owner can really free himself up a fair bit to think and work on getting bigger. And he could quite possibly be anywhere in the world. That, in essence, is the power of on-demand. The potential of productivity and economic growth across the globe.

Amen to the hype.