One of the first ways in which the Internet started transforming itself into "The Cloud" was through software. In the early days of computing, software was a big deal. Teams of software engineers would spend days, weeks or even months deploying their software into a client's computing environment. In those days, the big packages ran on mainframes - huge, wildly expensive, monolithic compute platforms, typically owned by banks and insurance companies.
Later, as the PC era dawned, companies like Microsoft and IBM recognized just how popular these systems would be. So they encouraged development of PC-based software by marketing their development kits. A footnote in history is that IBM missed this eary trend, and chose to try to generate revenue from their software development kits. Developers abandoned IBM's OS/2 platform in favour of Microsoft Windows, as Microsoft gave their software development kits away for free at Developer Conferences. Suddenly, there was all kinds of software available for the Windows platform !
Software became a consumer product - shrink wrapped boxes sold at big-box office-supply stores like Staples and Office Depot. Early on, these were merely "single use" copies of packages that consumers had gotten used to using at work. Titles like Microsoft Office and Lotus 123 were popular. Soon after came games and other amusements. And with the rise of PC popularity came the rise of malware. By giving away their software development kits, Microsoft unwittingly opened the kimono to early malware developers ! And so followed the rise of utility software, such as Norton AntiVirus and PC-Doctor.
In those days, the Internet was still in its infancy. Typically accessed via dial-up modem, and through a University or College campus, it was still very much a novelty. Slow & cumbersome, it was not really the Internet we think of today at all ! But as the Internet became commercialized, and cable or telephone providers brought the Internet into our homes & places of business, the demand for ever-higher data speeds increased. This was critical to the development of Software as a Service. Interestingly, the notion of paying for a product or service via the Internet was born about the same time. The sordid side of the story is that it was pornographers who pioneered the methods for accepting credit card payments online !
Apple hit upon the idea that the device (laptop, tablet, mobile device) was merely for consumption. And so they started with iTunes - building a business model whereby the device was the access-point to the Music Store. Following this model, the "App Store" was born. Apple didn't want to include the middle-man. Why not have the consumers directly download their software from Apple. They even went so far as to remove optical media devices (DVD/CD-ROMs) from their hardware.
Other companies had similar business models. SalesForceDotCom (SFDC) believed that the web-browser should be all a client needed to access their popular Customer Relations Management software. Previously, CRM was the domain of big enterprise customers, and was implemented by a team of software engineers. Requiring a high degree of customization, CRM providers like SAP and Siebel generated high revenues through their professional services teams. But SFDC changed that model. Being web-based, and easily available via the open Internet, SFDC makes it's revenues on a subscription model, similar to a magazine or a newspaper. But without requiring dedicated, on-premise hardware, large up-front software purchases and implementation teams, companies of all sizes flocked to SFDC.
SFDC's new subscription-based software service became the model many companies want to emulate. Microsoft now provides Office365 on a subscription basis. Adobe provides their image-editing software on a subscription basis. So when you start thinking about "The Cloud", think about Software as a Service. Stated even more plainly, think about a subscription-based business model.
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