IT managers wouldn't be out of line for questioning the need for client code in the software-as-a-service model. The beauty of SaaS is that it simplifies upgrades and secu-rity. The more code placed on a PC, the more to manage.
Even when RightNow's applications were browser-based, the vendor lost a customer in part because its service required an ActiveX control on the user's PC. Metrologic Instruments, a maker of bar-code scanning equipment, chose Salesforce instead. "We wanted people on the road to be able to go into an Internet cafe or wherever" to access their applications, explains product marketing manager Taylor Smith.
Gordon Ritter, general partner with Emergence Capital Partners, an early investor in Salesforce, is skeptical of hybrid Web-PC apps. "There's a reason Marc Benioff is religious about not putting software out there," Ritter says. The success of software-as-a-service companies, Ritter contends, hinges on how fast they innovate and get new features out, and having code on PCs slows that pace because users often don't keep up with the associated upgrades.
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And it would be a mistake to assume that the Web and the browser--both of which continue to evolve--aren't up to the task of handling applications without help from a PC. "The browser delivers an incredibly rich experience and usability today," says Kendall Collins, Salesforce's senior VP of marketing. "If you look at the growth we've had, it's not because there's any limitations in the browser."
The trick for SaaS vendors may be in developing no-fuss client code--so small, secure, and unobtrusive that an IT department can ignore it. In Minnesota, state colleges and universities have been testing RightNow 8. "There's no IT involvement whatsoever," says Kyle Snay, online knowledge and learning administrator for the state schools.
Of course, Microsoft has yet to weigh in. Much has been said of the need for Microsoft to get off its duff in delivering software over the Web, and the company's "Live" online services show progress. "Our business model will evolve to have much more of a services component," CEO Steve Ballmer said last week in a presentation to financial analysts. "The more we can have an ongoing, continuous relationship with our customers, the more opportunity we have to add value."
Software as a continuous relationship? Microsoft officials argue that hybrid Web-PC apps will not only help Microsoft get closer to its customers, but also will help those customers get closer to their own customers. Companies "want a piece of code on your machine that's a persistent experience so they can call on you rather than wait for you to call on them," says Charles Fitzgerald, general manager of platform strategy.
It's not without challenges. Fitzgerald admits "nobody owns and operates all the pieces" of distributed, hybrid applications. That's why the debate is raging.
