Software service providers are using more standardized packages, replacing, in many cases, custom programs that require small armies of programmers to support. That means service companies can also devise simple methods for handling all of their clients' applications, driving costs even lower. But it's not just about the money. Corporations freed from managing complex computing projects can focus on more important things. Web portal Excite Inc. farmed out its financial-management software to startup Corio Inc., based in Redwood City, Calif., so it could concentrate on customers.
Clients also are freer to experiment with new strategies and suppliers.
Indeed, Samsung is one of the early adopters. Now, two other software-service providers, Interliant Inc. and Digex Inc., have filed to go public. Even telecommunications upstart Qwest Communications Corp. is entering the software-services business. It's something we have to do to stay competitive,'' global managing partner Hugh F. Morris says. The momentum behind software services is building.