Thursday, November 17, 2005

One of the challenges for users of applications and creators of applications is how to charge and pay for the applications. CNET has an interesting article pointing out that businesses are less and less willing to pay upfront large fees to buy and deploy applications.

(CNET article Here)

The author has a number of examples of companies concerned about large up front fees, and instead going to use software on a pay as you go basis, with ASP applications like SalesForce.com as an example. That is one approach. I think a more valuable long term approach is for companies to pay for applications on a per user basis and not have only a small charge per server. All these enterprise applications going for large upfront fees are not giving companies the flexibility they need. For example the Dicodemy GForce application has a straight per user fee, and their is no server or enterprise charges involved. The reason some people like the ASP model for applications is that they only pay per user. However, with the ASP model you are giving control of your critical company data to an outside organization. A better solution is to allow you to run the application and services inside your organization, but only pay per user.

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