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Last Updated: Tuesday, 2 December, 2003, 08:46 GMT
New models for net business
By Mark Ward
BBC News Online technology correspondent

The net and the business world make a potent mix.

Close-up of AMD 64-bit chip, AMD
AMD has bought in to the idea of software as a service
Many firms have enthusiastically embraced e-commerce and have used the net to streamline and speed-up the business they do with both trading partners and consumers.

But although the net has changed the way many firms work beyond the borders of their business, internally they remain very old-fashioned.

Many firms still spend millions of pounds and months of their time creating their own in-house versions of complex programs that help them run their business.

Service centre

Software firms such as Sap and Siebel have had enjoyed huge success supplying the software that firms have been customising to their own ends.

"But," said Marc Benioff, chief executive of Salesforce.com, "there is a lot of cost associated with putting it in place and there's a huge cost associated with delivering any sort of business benefit."

Instead of going the in-house route, said Mr Benioff, many companies were using companies like Salesforce.com that supply their software via the web.

"We are a big database in the sky," he said.

Marc Benioff, Salesforce.com
Benioff: We're a big database in the sky
"Software should be like the power company, a utility, and not something that you should have to run yourself," said Mr Benioff.

Instead of paying the software, hardware and staff costs associated with in-house projects, users of Salesforce.com only pay a subscription fee.

Mr Benioff said software as a service was the next logical development in e-commerce and was typically quicker to deploy than comparable in-house projects.

Salesforce.com now has 8,000 companies as customers and some, such as chip maker AMD, have thousands of sales staff using the software service.

Mr Benioff said that recently even in-house advocate Siebel had recently announced that customers can buy its software via monthly subscription.

Security check

Salesforce.com is not alone in selling the idea of software as service. Others such as UpShot, NetSuite and Salesnet do the same and the idea is spreading to other sectors of the technology market.

"If you look at the problem of enterprise software," said Philippe Courtot, chief executive of security firm Qualys, "you have to develop an application and deploy it on an environment that you do not really understand."

"The cost of quality control is really expensive," he said.

By contrast Qualys supplies its network scanning tools as a black box that sits on a customer's site that looks for vulnerabilities that firms must patch if they are to protect themselves against viruses, trojans, worms and malicious hackers.

"The internet is helping to enable this," said Mr Courtot, "you do not have to worry about the delivery mechanism, it is just a service in your browser."

Mr Courtot said because all customers were on the same system, everyone had the most up to date version of software and bugs, once found, could be eliminated from every black box in the field to ensure no-one is tripped up by them.

"Instead of getting more and more buggy as you add more features," he said, "it gets better."

"The alternative with patches and point releases?" said Mr Courtot, "It's a mess."

He said some companies were using the scanning system as a remote management tool for outlying offices to ensure that key maintenance and software updates were being done on time.

"Today, with automated attacks, there's no way that people can escape," said Mr Courtot, "you have to take control of your network."

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