There was a time when buying Hardware and/or Software was an art form. Hardware (if you got your timing right) could be sweated for many years. Software deals although a little more complex, were always negotiated. Those days are long gone! What Happened?
Simply put, IT vendors got greedy and simply decided to rather Milk us Dry by moving to a "Rental Model". It initially made sense, customers were closing down their Data Center's and migrating to the Cloud. With cost effective Virtual Servers now the norm, it made perfect sense. But from there on... it went into overdrive.
Servers had long become commodity items, to the point that IBM sold off it's popular X-Series Server business to Lenovo and Dell started moving into value added products higher up the food chain. Giant companies with their huge investments in infrastructure (like Amazon, Microsoft & Google etc.) started building their own servers to their exact requirements. They made huge savings by doing this...and now they are able to simply force us to "rent" their Servers for a monthly fee. Software vendors like SAP, Oracle, Microsoft etc. are doing the exact same thing! Customers don't buy their ERP Solutions any more. Nor do they buy their Office Automation solutions either. They are almost all hosted in the cloud and simply rented out .... for ever. What does this mean for the average "end user" in the future though:
1. Microsoft will almost certainly in the coming years extend this same business model to the Operating System itself. Want to use the next version of the Windows OS? Forget it!, By then you will be forced to pay a monthly rental to Microsoft for the use of your Operating System. You will certainly be doing the same for your Microsoft Office Automation too.... you probably already are.
2. It's going to happen in cloud storage too. We are going to be forced to store our data in the cloud and it is not going to be free. Google has already decided to delete all it's limited unpaid (free) data after 24 months of inactivity now... so if you want to ensure continuity for the long term (think family files, photos, history), you need to ensure that you have another plan. For a long time now we have been hooked on Free cloud storage... BUT they are going to come after us and hit us hard! It's not if.... but when!
3. Infrastructure as a service (IaaS), Platform as a service (PaaS) and packaged software as a service (SaaS) are going to be the standard way we will access all of our computing requirements. For the uninitiated, it means that if you want to acquire technology in the 21st Century.... you are going to have to rent it! We may even be given free "Chromebooks" to facilitate and encourage this change exactly the same way some Printer companies gave many of their corporate customers free printers so that they could "milk" them for the ink!
4. If one thinks this is all pie in the sky, just think about how corporate customers used to run their WAN's (Wide Area Networks). They bought fancy Routers from the Likes of Cisco & Juniper etc. and managed them in-house. That has long ceased to be the case. Ever since the popular rise of VPN's, routers and other customer premises equipment are all simply rented as part of the total package! Even Firewall and other security solutions are simply rented and managed, often all off-site too.
So where does all of this lead us to, and what options will we have:
i. Affordability - For cost sensitive end users as well as those in the developing world with soft currencies, a monthly rental of a OS solution is simply not going to happen. Expect to see a HUGE swing to LINUX and other open-source software for that matter (Think LibreOffice)! It's already happening. Desktop Linux is free and there are many various distributions to choose from. It's major weakness is the lack of decent available user support, but that too is changing quickly as more and more young people enter the work force and are keen to use it and be exposed to it.
ii. Flexibility - In forcing customers to rent their software packages it is going to expose their one real weakness, and this is all about Geo-Politics! SAP, Oracle, Microsoft, Google etc are all operating out of the 1st world. i.e. USA or Europe. But we know full well what comes next. Expect a wave of new competing software solutions from India, China, Brazil & South Korea etc. It will take time, but it's going to happen.
iii. AI (Artificial Intelligence) - It's the new kid on the block and it's going to possibly turn traditional software vendors on their heads. Just like what happened to Kodak, GE, WorldCom, Lehman Bros etc.. They won't see it coming and when they finally do, it will simply be too late. It is very possible that a decade from now having an AI system writing your own software for you will not only be viable, but preferable too, this as it will be custom built to your own exacting specific needs. Just ask any existing SAP customer about that frustrating issue alone... or even worse, the bankruptcy of the Birmingham (UK) City Council reportedly due to a failed implementation of Oracle's local government ERP solution.
iv. The Cloud Hosting Companies have over time become greedy....so for the 1st time we are starting to see large corporate customers bring some of their applications and data back in-house again. This could be an important development as customers are already reporting savings by doing this: Read This.
