Business Model Of The Future

I have watched with interest the changing business model for software sales. The hosted model, know to many as ASP or On-Demand, was thought to be the end of software sales as we knew it. It wasn't. It created new ways to get hooked or to try out software, but the really good stuff, the software features you really want, still cost lots of money and are mostly hosted by the buyer.

Next came software by subscription. I always thought this might take off, and it has. Especially for established software vendors. It removes the iffy maintenance agreement and makes the software "critical". Since you don't actually own it, you have to pay the annual fee to keep the system up and running. The rebellion that led companies to reject high maintenance fees and crappy software support has won only a partial victory. Seeking to cast off the shackels of the software vendors and high annual maintenance fees, companies have won the right to not pay for software they don't use. But unlike in the days when you purchased the software and you had a perpetual license to use it, under the subscription model, if you don't pay, the software stops working. Free from maintenance only to be hooked by subscription. What does the future hold?

Let me go out on a limb by saying that I think that personal software will go the way of subscription, but business software will come back to a solid purchase model. Why? It all boils down to a solid return on investment. I believe that software companies will evolve, and that BPM will become a sort of operating system for businesses to build their business processes on. Business processes will become applications. Once that happens, companies will develop their own applications that are really business processes using one piece of software, not modules or loosely integrated applications. Paying maintenance and support will be simplified because it will be based on the number of users and processes, not modules. ROI can be easily calculated because process metrics will be automatically collected.

Business processes will be like lego blocks, able to be assembled into any configuration to create custom business processes and projects. The processes of the future will be more "organic", not like the services envisioned today, but discrete process objects that can be linked and unlinked into infinite combinations.

We are driving toward this vision of the future.