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In the cloud, even custom apps will be a commodity

I’ll make this short because God knows you’ve read enough about cloud computing and its software variation, SaaS. This concerns the cloud and custom apps, in particular the proprietary apps and IT systems for specific industry verticals. These are the technology-driven unique solutions that give a business its competitive edge and that IT departments have hung their hats on for a long time.

Cloud computing, a delivery mode well-suited to commodity services, will change the delivery of those custom apps too. Or at least, that was the observation of Dave Hansen, a former CIO who now works for CA Technologies, in a recent discussion about the impact of the cloud on the role of the CIO.

“These are the things your industries all have very unique solutions for, that you say … no way anybody else can do,” Hansen said.

Right now, Hansen ventured, there is no such thing as a poultry IT management system — as far as he knows. But there will be one. There will be a poultry IT management system because even though the market for it is small, the cost of entry to develop software and deliver it as a service is soooo low that somebody will do it.

“CA would never ever, ever spend a dime looking at a $10 million market. It wouldn’t be worth it, given the infrastructure that we have,” Hansen said. “But two monkeys and a zebra with a couple of cases of beer would, right?”

As the cloud market matures more, those two monkeys and a zebra will be bundling software into vertical solutions and selling them as services.

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Applications have been commoditized for years… SaaS is no different. That’s why it crucial that successful business models provide value added services, such as SEO services for CRM solutions. I meet so many tech companies that think they just need to create technology solutions and never consider the need for creating value added services.