2006 could be the year of the online software boom

by  Alan Zisman (c) 2006 First published in Business in Vancouver January 10-16, 2006: High Tech Office column; Issue #846

Until now, nearly all of the software that we've run, whether at home or in the office, has existed in one of two locations: on your personal computer's hard drive or on a server for a local area network. In both cases, the key word is "local."

More and more, expect to be running software over the Internet. This is made possible by the convergence of several technologies, including increasingly common broadband Internet access and a set of programming tools (often nicknamed "AJAX" for Asynchronous JavaScript and XML) that make it easier to create, distribute and run online applications.

Online applications aren't entirely new. Intuit, for example, has offered Quickbase, a subscription online database for several years. It also offers online tax return services. Vancouver-based Functionpoint provides online project management, while any number of companies, including locals Maestro CMS, Hi-Performance Enterprises and sPearCat offer businesses online tools to maintain websites.

Google has been busy pushing the envelope with a host of online applications such as Google Earth. (Click on the "More" link above the Google search field to enter a veritable candy store of online treats.) The formerly Vancouver-based Flickr photo-sharing site (now owned by Yahoo) is another AJAX-powered online application.

Salesforce.com has been a leader in selling customer relations management (CRM) software. Despite this, the company is predicting the end of the traditional software model.

"In a short time, all technology will be delivered via the on-demand service approach," company VP Phil Robinson told a recent Toronto CRM conference. The company is moving its own products to its online AppExchange system, which also allows potential customers to browse over 70 applications from a variety of vendors.

Currently, according to ITWorld Canada, Salesforce.com leads the on-demand market with some 17,000 customers representing a subscriber base of over 300,000 users. Its success has sparked interest from major software vendors. Oracle, for example, has acquired Siebel and will soon begin offering that company's CRM OnDemand service. SAP AG is planning an on-demand CRM product in 2006, and Microsoft is now offering a monthly subscription to its Microsoft Dynamics CRM.

Salesforce.com duplicates its service's data centres to ensure that customer data is not affected by network outages.

Customer relation software isn't the only product area facing online competition. Even traditional product categories such as office suite software is becoming available as an online service. InetWord, from Kirkland, Washington-based Forward Center (www.inetword.com) aims to provide an online replacement for Microsoft Word, for example, offering a Web-based environment to edit Web pages and word processor documents using devices resembling the familiar Word toolbars and keyboard shortcuts, in a surprisingly quick and responsive interface. Currently, the product is only available for Windows Internet Explorer users, though the company expects to make it compatible with Firefox in 2006.

Forward Center is planning to license its service through Internet Service Providers, who would offer it to their subscribers; free individual demonstration accounts are available now.

Another browser-based word processor, Upstartle LLC's Writely (www.writely.com) is in beta testing and supports Windows and Mac users of Internet Explorer, Firefox and Mozilla, with Opera and Apple Safari browser support expected soon.

The company currently permits free registration, allowing users to edit and store documents in HTML, Microsoft Word and OpenOffice.org formats, sharing editing privileges with multiple users if desired. Multiple users can safely edit a single document at the same time, making it a potential collaboration tool.

Late in 2005, Microsoft promised a set of vaguely described "Windows Live" and "Office Live" online services to complement (though not replace) upcoming versions of those products (see http://ideas.live.com).

Delivery of online software as a service has been growing for several years. I wouldn't be surprised if 2006 is the year when it becomes "the next new thing."