Many companies have become increasingly reliant on sophisticated software such as CRM and WPM, but simultaneously more and more frustrated with long deployment cycles, the complexity involved in upgrading, high expenses and infrastructure demands of traditional softwares (Thinkstrategies Inc., 2005) while businesses, especially Small and Medium sized (SMBs) find themselves in a predicament over managing time, money, staff and technology efficiently while coping with external pressures such as growth, regulation and outside competition. (Saugatuck Technologies, 2006)
Figure 2‑1 Coping with Business Pressures
(Source: Saugatuck Technologies, 2006)
This shows that as companies expanded their businesses, so did the need for automation and computing power to carry out transactions faster and to store huge amounts of data, but installation of business applications meant huge investments in the proprietary software licenses as well as IT hardware resources and IT personnel resources.
During the late nineties, a new trend began to emerge, that of Application Service Provider (ASPs), in which the ASP hosted proprietary software for a customer on its own premises, and the data could be accessed over a network interface. But with the cost of software and infrastructure deployment and service fee being passed over to the customer, it soon turned out to be very inefficient and unprofitable for the customers and this model of software deployment soon collapsed.
According to May (2007), in the case of ASP models, the delivered applications were often awkward adaptations of traditional software with the underlying software not designed from the ground up to travel well across the Internet and hence glitches, delays and extra costs were common.
