Cloud vs non cloud software sales
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@Dashrender said:
I had lunch with a friend (a seasoned IT professional) who decided to raise the subject of the ‘Cloud’ and proclaim the demise of ‘Perpetual / on-Premises’ software around the year 2015 (ongoing, I’ll refer to 'Perpetual / on-Premises' as ‘non-Cloud’).
Where he specifically says on-Premises a few times.
Yes, but he also uses perpetual which means something completely different. He's combining unrelated terms which either means that he doesn't understand what he is saying OR he's only considering small, overlapping portions of the market which makes no sense as the big market pieces are the ones that he does not cover.
On premises is not perpetual. Subscription is not hosted. Office 365's Office 2013, for example, is subscription, not hosted. Same as Adobe and JetBrains products. Or Oracle, or SAP. They are all subscription so don't fall into the on-premises/perpetual camp but they are not hosted so don't fall into the hosted/subscription camp. See the dilemma? No matter how he uses the terms, his article makes no sense.
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He says that he will refer to perpetual as "non-cloud." But tons of cloud servers, even cloud computing hosted IaaS, would be ruled as non-cloud then. His definition groupings are insane.
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So if we were going to take a list of some of the biggest products on the market today for software:
- Adobe Creative Suite
- MS Office
- Windows
- Oracle Databases
- SAP ERP
Just as examples.... which camp do they fall into? All of these fall into "conflicted" categories in the author's descriptions leaving us unsure whether he counts any of them as "cloud" or "not cloud" by his definitions or if he is dropping all of these because they don't fit into either of his made up categories. He isn't clear at all.
Imagine if he called one group of people "Group A" and defined them as "tall / male" and "Group B" as "short / female." Sure, lots of people fit those categories. But tons and tons of people are "short and male" and lots are "tall and female." Given that there are only two choices, are we dividing by height or gender when there is a conflict? Or are we dropping from consideration all people who don't match all criteria?
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Definitely agree it's poorly written.
I'm guessing, only guessing his intent was to say subscription itself doesn't matter, i.e. adobe Creative Suite wouldn't count because there is no cloud product, it's only local, and a single license used to be perpetual, but now is subscription.
I suppose Windows could be in either camp probably the same for Oracle and SAP, i.e. do you deploy in your own datacenter, or do you pay a monthly price to someone else to do all the work and you only worry about the data.
But I can suppose all I want, I'm not the author, so who knows what his real goal was.. and this confusion is why I posted this hear.
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@Dashrender said:
I'm guessing, only guessing his intent was to say subscription itself doesn't matter, i.e. adobe Creative Suite wouldn't count because there is no cloud product, it's only local, and a single license used to be perpetual, but now is subscription.
The problem is, he states that this cannot be by listing perpetual and subscription along with other details. So he rules out the possibility of either thing being what he said. He's stuck with statements that have no purpose or merit. Maybe he's confused and should not be writing, or he is intentionally trolling us. I'm guessing the former, because he comes off looking like an idiot.
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@Dashrender said:
I suppose Windows could be in either camp probably the same for Oracle and SAP, i.e. do you deploy in your own datacenter, or do you pay a monthly price to someone else to do all the work and you only worry about the data.
Windows, Oracle and SAP are all standardly available via subscription and hosted on premises making all of them commonly fall outside the scope of the article entirely. Hence the major issue. All of the use and have used for a long time subscription pricing, at least as an option. But we can't tell if he is unaware of this or is including their on one side or the other. We have no idea how he treats the bulk of cases. So his numbers are pointless.
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I hear what you are saying...
I just keep seeing that it appears to me that his purpose was to say that how you pay isn't really the point, yes the use of perpetual here confuses things, but if you drop that, the point I'm pulling him saying is that people aren't bailing on local installed solutions vs moving to someone else being totally responsible for the solution, and the end company only worrying about the data.
Using email as an example... he's appears to be claiming that no where near as much as we're made to believe are people bailing on Exchange completely under your own control, be it in a local DC or hosted in a DC but you completely control all aspect vs moving to O365.
I suppose for a windows comparison it would be having local (or remote DC again fully managed by the end user) vs completely moving to Google Docs with no local servers anymore.
But again, I can't be sure.
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@Dashrender none of those, as he wrote the article, hold up, though. In order to make his point he fails to provide support for any of those possibilities. He uses examples that make no sense. Office 365 IS on premises for Office 2013. So is he using Office 365 as an example of hosted or as an example of on premises? Because the only clear cut thing is that Office 365 always means subscription, rather than perpetual, but does not mean hosted rather than on premises, it does both of those.
Maybe he is saying that how you pay isn't point, but he sure makes a huge point of trying to make it the point, then doesn't support it in any way and comingles it with how things are hosted.
I think the only thing to be gleaned from the article is that the author has no clue and likely his point, whatever it may have been, is likely invalid or he would not have had to have tried so hard.
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Do you see O365 more about getting Office 2013 on your local machine or more about email and sharepoint? If you leave the local install of Office out of the equation it's completely a cloud based solution (i.e. on the internet).
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@Dashrender said:
Do you see O365 more about getting Office 2013 on your local machine or more about email and sharepoint? If you leave the local install of Office out of the equation it's completely a cloud based solution (i.e. on the internet).
I don't see it as either. Office 365, as I've spoken about at events on Microsoft's behalf, is purely a subscription licensing model from Microsoft. Microsoft offers traditional retail licensing models, their blended volume licensing model (perpetual + subscription) and their pure subscription (Office 365) purchasing models. When you say Office 365, the only thing you are guaranteeing that you are speaking about is subscription pricing.
Now within that, I think that most likely the hosted services are the bigger piece but it has to be close as the on-premises pieces are much more expensive per purchase. Lots of people think of it as only one or the other, the thing that unites them all is the subscription-ness of the whole thing.
IF you leave off the biggest portion of the service AND discount the name of the service... then sure. But likewise, if you leave off the Exchange, Sharepoint and about to be discountinued Lync portions you have a purely on-premises solution. And if you look at the freebies, it's the hosted bits that are free to non-profits and the "real" portions that you pay for are mostly the on-premises portions.
Also, even the hosted portions, if you want things like AD, still require an on-premises component.
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There is no doubt that the hosted portion is more groundbreaking, as the other is just a different charge-back model. But the hosted portions are just the "backing" for the on-premises portions. Hosted Exchange is just a loss leader for selling Outlook. Hosted Sharepoint is just a loss leader for selling Windows and MS Office. Sure you can use them on their own, from a Mac even, but their core value does not exist until you add in the on-premises only MS Office components that really make them shine.
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@scottalanmiller said:
There is no doubt that the hosted portion is more groundbreaking, as the other is just a different charge-back model. But the hosted portions are just the "backing" for the on-premises portions. Hosted Exchange is just a loss leader for selling Outlook. Hosted Sharepoint is just a loss leader for selling Windows and MS Office. Sure you can use them on their own, from a Mac even, but their core value does not exist until you add in the on-premises only MS Office components that really make them shine.
You don't think over time customers will migrate away from the locally installed apps and use the online version primarily?
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@scottalanmiller said:
Hosted Exchange is just a loss leader for selling Outlook. Hosted Sharepoint is just a loss leader for selling Windows and MS Office.
Really? I've never heard that.
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@scottalanmiller said:
Hosted Exchange is just a loss leader for selling Outlook. Hosted Sharepoint is just a loss leader for selling Windows and MS Office.
Considering this, @scottalanmiller do you know how the percent of people who use O365 that buy full Office vs web only?
And if the $5/user web only option is a loss leader, what happens when the majority move that direction and away from a local install?
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@Dashrender said:
@scottalanmiller said:
Hosted Exchange is just a loss leader for selling Outlook. Hosted Sharepoint is just a loss leader for selling Windows and MS Office.
Considering this, @scottalanmiller do you know how the percent of people who use O365 that buy full Office vs web only?
And if the $5/user web only option is a loss leader, what happens when the majority move that direction and away from a local install?
I don't think that will ever happen. Of the ~70 users that I have on Exchange Online... maybe 4 of them use the web interface on a day-to-day basis... all the others are adamant that they need Outlook to do anything productive with email, to the point where they won't check the web interface remotely.
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@coliver said:
I don't think that will ever happen. Of the ~70 users that I have on Exchange Online... maybe 4 of them use the web interface on a day-to-day basis... all the others are adamant that they need Outlook to do anything productive with email, to the point where they won't check the web interface remotely.
Pretty much this.
Eventually it will change, but not yet.
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@coliver said:
I don't think that will ever happen. Of the ~70 users that I have on Exchange Online... maybe 4 of them use the web interface on a day-to-day basis... all the others are adamant that they need Outlook to do anything productive with email, to the point where they won't check the web interface remotely.
I know people want to use what they know, but unless there is a plug in for Outlook, what is better about Outlook vs the online version?
If management made them give up Outlook, would they still be able to get their job done?
I agree with JB, eventually we'll get there, though it will probably be 10+ years...
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@Dashrender said:
@coliver said:
I don't think that will ever happen. Of the ~70 users that I have on Exchange Online... maybe 4 of them use the web interface on a day-to-day basis... all the others are adamant that they need Outlook to do anything productive with email, to the point where they won't check the web interface remotely.
I know people want to use what they know, but unless there is a plug in for Outlook, what is better about Outlook vs the online version?
If management made them give up Outlook, would they still be able to get their job done?
I agree with JB, eventually we'll get there, though it will probably be 10+ years...
Outlook has some addition functionality that is easier to get to. But the web interface is 99% there. If we had to give up Outlook everyone could easily get there jobs done... of course my head would be on a stake as a warning to other IT Pros.... but they could get their job done.
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@coliver said:
Outlook has some addition functionality that is easier to get to. But the web interface is 99% there. If we had to give up Outlook everyone could easily get there jobs done... of course my head would be on a stake as a warning to other IT Pros.... but they could get their job done.
I don't use it BUT most people still do. Functionality being better wouldn't make them switch.
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@Dashrender said:
I know people want to use what they know, but unless there is a plug in for Outlook, what is better about Outlook vs the online version?
I use OWA only and I think that it is better.
