And, yesterday, there was more evidence of critical change for IBM: the $182 million purchase of Corio
The traditional approach to software is to have a customer install software on its own network. In contrast, with the ASP model, the software is hosted by a technology provider. In effect, a customer uses software when it needs it. And as a result, there is no need to make big investments in hardware. From the customer's perspective, updates and maintenance are outsourced.
Companies like RightNow
Corio has a comprehensive portfolio of subscriptions for applications from companies such as Ariba
Finally, IBM may also have another motive: to grab potential customers that are dissatisfied with Oracle's takeover of PeopleSoft. It could be yet another reason for customers to go ASP.
Fool contributor Tom Taulli does not own shares mentioned in this article.