guest commentary: Software for Hire

Several years ago, some IBMers predicted the rise of the "information system utility," whereby devices such as PCs or workstations could plug into data processing power the same way we plug into the wall for electricity. The Internet and the Web have brought this concept close to reality.

Now, this concept may put a dramatic new spin in the way we buy and use software. Instead of being purchased as an entire package, some applications can be now be rented on an as-needed, one-time basis. The required application is downloaded from an ISP, which holds a master license, and used for a few hours, days, or weeks. The user is then billed by the ISP. This kind of offering is limited, but may grow quickly. Forrester Research (Cambridge, Mass.) projects that the market for rentable apps will account for roughly $6 billion of the $20 billion applications outsourcing model by 2001.

While it remains to be seen how such a model will play in the AS/400 world, leading proponents of rentable apps are offering such services with AS/400-friendly technology. The concept was first brought into the corporate light by Lotus Development Corporation in 1997, promoting ISP delivery of rentable applications off Domino Web servers. At that time, Lotus introduced the first rentable app it would license to ISPs, a collaborative environment called Instant Teamroom.

Spurred on by Lotus, some leading ISPs are starting to position themselves as applications rental agents. Interliant Inc. (Houston) recently launched Interliant AppsOnline, a catalog of rentable software, which includes Lotus Instant Teamroom, along with a Year 2000 risk management system, an employment exchange for human resource managers, a Lotus Notes-based team selling application, and real estate management package. Many of these initial offerings are built on Lotus's Domino Instant Host.

Last year, US West Communications Inc. (Denver) signed agreements with six major vendors, including Microsoft, Oracle, and Novell, to offer applications on an as-needed basis via its national data network. "Customers no longer have to purchase expensive software to run specific applications," says Solomon Trujillo, president and CEO of US West. US West also offers Lotus's Instant Teamroom. A related trend is application outsourcing, where applications are hosted on a third-party site. USInternetworking Inc. (Annapolis, Md.), offers software from PeopleSoft, Sagent Technology and Siebel Systems on a monthly fee basis.

A Java-based Year 2000 tool which support AS/400 conversions is now also available for rent off the Internet. Millennium Key from RMM Inc. (Columbia, Md.), a Y2K date-windowing tool, is targeted at small to medium-size companies that may not have the resources for other tools on the market, says Tom Soeder, chairman of RMM. "You can lease the software like you'd lease a rental car," he says.

Can the day be approaching when Java-based applications are made available on a rental basis for enterprise-level AS/400 sites? Don't be surprised. Already, many AS/400 vendors are showing savvy in offering demos and beta versions of their software over the Web. There's a great opportunity to leverage the presence of ISPs as delivery centers for enterprise applications. Other prospects include trade groups and hub companies in e-commerce supply chains, which may also serve as rentable application providers to their business partners or members.

Since Lotus has laid the groundwork for the concept, virtually any Lotus application can be offered on a rental basis through an ISP, says Steve Brand, general manager of hosted Internet solutions for Lotus. That includes "thousands of applications in vertical and horizontal areas, from 16,000 business partners."

Eventually, mission-critical applications will also become available on a rental basis, Brand predicts. However, as their usage grows within the organization, those applications will be brought in-house.

"Today, it takes a week for IS to start setting up an application," Brand says. "Tomorrow, we'll be able to go to a catalog, pick an application, and have it immediately created."

Other radical approaches to electronic software distribution are also evolving. For example, it may be possible to use free software offered through promotional Web sites. For example, today's search engines or portals, such as Yahoo! and Lycos, are essentially query tools that are free to use and supported through online advertising. Web tools such as Adobe Acrobat Reader and RealPlayer are offered free as enticements to spur interest in higher-level fee-based products. Financial tools, such as mortgage calculators, are offered for free use to draw eyes to financial services and real-estate sites. Don't be surprised if in the near future, we may see even more sophisticated software offered for download from advertising-supported or promotional sites.