But the Internet changes the way in which those assets have to be deployed, in that companies are able to integrate their business processes with those of business partners more so than ever before. Forrester Research analysts predict traditional business applications, such as enterprise resource planning programs, will not even be the main drivers for hosted services. Rather, applications written from the ground up for e-business transactions are expected to become the leading hosted programs. One challenge for the established vendors is that their applications were designed to be used by individual companies, not shared among many. That adds to the work that needs to be done to roll out an application service to each new customer.
Pricing is also an issue.
Oracle and J.D. Edwards have constructed their services so there's no adverse revenue effect on their sales staffs. For a given period, business customers will pay a per-user monthly fee that includes license, implementation and service. At the end of the term, they can buy or renew their lease. Going forward, businesses moving into e-commerce will make more as well as more urgent demands on software vendors and service providers that will force further changes by the software vendors and ASPs. Some customers will look for new Web-based applications that will let companies collaborate more easily.