During 2007-8, SaaS and Web 2.0 disrupted the applications market:
SaaS presented an alternative model for application consumption, and Web 2.0 presented a set of new practices and tools for internal and external collaboration.
During 2008, Social Software and Open Source Applications also started to undermine existing models. Both these areas rely on economies of scale and provide more value the more people use them. Social software is gaining much attention in the global market, while most Israeli organizations aren’t even aware of the possibilities of using these models within the organization walls. We recommend CIOs to start thinking about how social software can help promote their organization on the one hand, and on the other - improve internal collaboration within the organization.
Open source (OS) software is also not yet a hot topic in Israel. While a Cutter IT Study (2008) suggests that 65% of global organizations are already using some kind of open source software, most Israeli organizations we have talked to aren’t considering using OS tools and much prefer the traditional “proprietary” software model mainly due to local support issues. Lately some organizations have began to express interest in open source applications for very specific and limited needs: Electronic Forms, Blogs, Wikis, Search. As one of the IT managers I spoke to told me recently: "open source apps are ok for the internal, IT stuff, but I would never provide open source apps to business users, it's too risky".
SaaS has finally started to enter the Israeli market during 2007 slowly, but surely, mainly due to Salesforce.com’s entrance to the Israeli market. However, there isn’t much activity in the SaaS market besides this vendor. Most user and vendor organizations are still waiting to see what happens in this market before jumping in.
What about cloud computing?
There's no doubt that the current economic situation will do a lot of good for the "cloud concept". Cloud computing, which is essentialy "anything as a service" (XaaS), will fit very nicely into the new paradigm: Service instead of Products.
We don't hear expressed intentions of organizations to start using the cloud for their software/platform needs, but I think that once the services are available, they will attract organizations. The reason will not only be managing costs more easily (cloud services will be considered an expense), but also simply taking all the "headache" out of things that are not in the core business of the organizations, or, in other words - commodity.
Sound familiar? Exactly the same arguments for outsourcing, except today outsourcing is not an "issue" anymore. The same thing will happen with cloud computing. A few years from now, mail and calendering services will mostly be provided through the cloud, as well as other "commoditised" services that the organization doesn't want or need to fuss around.
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