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“Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It's not about money. It's about the people you have, how you're led, and how much you get it.” - Steve Jobs

Does “on-demand” mean less quality?

The alternative title for this piece could be, “The Dangers of On-Demand Software Services.”

The premise for this article is that due to the properties of the technology and business models of On-Demand Software Services (ODSS), there is a great risk that ODSS corporations sacrifice quality.

More below, but first some background
On-Demand Software Services (ODSS), formerly known as Application Service Providers (ASPs) is a software product that does not require any installation on the customer’s machines. SaleForce.com has become the recent poster child for ODSS trying to capture the lucrative and competitive Customer Relationship Management (CRM) market from the much more expensive enterprise solutions of Oracle, SAP and of course Siebel. They have been successful because they help small to mid-sized companies get the same level of software capabilities but without the heavy overhead that comes with an installed enterprise solution like the ones mentioned above.


Most of the heavy-weights have tried to help their cause by creating installed web-based solutions. The problem there is that the customer still has to have a very intense hardware and administrative infrastructure in place. So it doesn’t match the complete hosted solution that defines the ODSS. This is why SAP has announced a plan to created a hosted ODSS solution.

Enough Background
Because of the lack of investment by ODSS customers the business model and the market qualities are highly heated and competitive. It is just too easy to move from one solution to another. I realize that there are definitely issues, such as data management that make for some level of investment, but these are nothing compared to the hundreds of thousands of dollars that usually go into a full installed enterprise solution.

This has meant that ODSS providers have to run an organization around rapid fire releases with functionality enhancements galore. While enterprise solution providers put out releases every year or so, ODSS providers try to put out multiple releases a year. Why? because “they can” and because the market “demands it”.

The market is always a huge factor. But it is a big factor for all software development so I will not go into further detail in this point except to say that market forces cannot be ignored but that there are other ways of dealing with market forces other than through change management.

As for the “they can” piece, this is where I feel ODSS is dangerous. Since change has little to no effect on the customer (the point of ODSS) it is easy to suggest changes to an ODSS solution. The ramifications for mistakes even are mitigated by the fact that the next “fix” is only weeks (not even quarters) away.

The move by SAP scares me b/c it shows the unavoidable reality that ODSS is going to be more of a norm instead of an exception. And like all technology movements there is usually a period of learning. This all reminds me of HTML & Flash, and other enabling technologies. Think of all the ugly 1996 web sites out there. They were all just heinous. I know! I created some. We just didn’t think about it all yet. We didn’t think about the pandering toward mediocrity that we were doing because we sold the world on the phrase, “the web is cheap”. Flash as another enabling technology faced the “99% bad” wrath of usability experts because it was too easy to enable designers to go off in a flury of graphics, animation and sound to create headache producing unusable interfaces for the masses.

ODSS is having a similar effect. Companies like SalesForce.com are just moving too quickly, and creating mediocre services, justifying them on the basis of market conditions. Like Web 2.0 and AJAX and other new and fantastical technologies, the rebirth of ODSS (from the ashes of ASP) seems to be having repercussions that is swinging the pendulum of usability & design backwards. It is just too easy for hyper-market aware providers to say that “it can wait”.

Juxtapose this for a moment with a “shipping” product. When you really ship something, you can’t say “this can wait till the next release” nearly as often. You have to have a product that can just stand on its own. Yes, more installed software is coming with rapid update capabilities and that is great! It helps the end-user. But on ODSS the user and the software update process has an increased level of separation, so there is less concerns for these types of fixes.

Last point, is that I think there is a drive in the ODSS business models to be more reactive to the needs of customers, as opposed to the needs of users. Again, the lack of investment by customers means that there is greater fear of their emotional responses to the word “No”. AND customers have less concern for their end-users, so they don’t want to make further investments in the software to shore-up its implementation success. This is very common among enterprise installed options where customers become entrenched in helping software companies make the software they bought better. This just doesn’t happen in ODSS. It is “on-demand” … It should just work.

Of course, it won’t work (at least not well) without their attention, and more importantly their user’s attention.

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