Is software in a box on the way out?
It’s becoming more and more prevalent for software to be distributed by an Internet download rather than on a CD. But once you have it, the software still involves the conventional type of license. A bigger departure from past practices is “software as a service”, which has become a buzzword phrase. This can mean software that is on the local computer but which requires an annual subscription fee to use or it can mean software that is located and used on the Internet itself, also for a periodic fee. Another model of software distribution that involves the Internet is to provide free services but use advertising as the revenue source. One way or the other the conventional shrink-wrapped application in a box bought with a one-time license fee may be on the way out. Informit.com has a Wharton School analysis of what these developments may mean for Microsoft. It begins:
Microsoft’s Vista operating system should give the company a revenue stream that will run for years, but that doesn’t mean the company can rest on its laurels. Experts at Wharton say the January 30 launch of the consumer versions of Microsoft’s flagship software may be among the last of its kind — a product sold for a flat fee in a shrink-wrapped box. Indeed, many wonder if the software business model that has made Microsoft so dominant for the last 20 years may begin to fade in the decade to come as new software business models — from open source to advertising supported — gain increasing traction.
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