The CIA’s ‘revolutionary’ announcement of their changes to the way they buy software shows just how the relationship between software vendors and businesses is evolving as cloud computing methods become widely adopted.
For businesses it means more flexibility and efficiency while for software companies the new marketplace is requiring them to be more flexible and responsive. Those changes will challenge some vendors.
What’s driving these changes is ‘big data’ – the explosion of data being collected and stored – and the move to cloud based computer systems.
The CIA, like most businesses or home computer users, used to buy software by the license. For small businesses and homes this was by buying a box of disks from the local computer shop while for big organisations there were volume licenses where they bought the right to use tens of thousands of copies of the one program.
Box licensing was never satisfactory, it was difficult for users to know what exactly they bought and customers were always a year or more behind the trend.
Keeping up with Technology
One of the big pluses with cloud based systems is you don’t have to wait a year or two for a new release incorporating the latest technology. It’s rolled out as it becomes available without any work by the user.
With the old box software model you had to wait for the latest release and even then the features you were waiting for could still be missing.
As technology is moving fast online, organisations like the CIA can’t afford to wait.
Pay as you go
Another problem with the old software model was that big and small organisations found they were buying things they didn’t need.
This is particularly true with licensing agreements where a company might have 100,000 licenses when they only needed 15,000.
Pay as you go billing, which is the standard model for cloud computing services, means a lot more flexibility and a much more efficient way of managing software spend.
Closer relationships
In his speech describing the changes, the CIA’s top technology officer Ira Hunt said the agency is prepared to give vendors a “peek under the covers”.
This sort of closer relationship between suppliers and customers is one of the biggest attractions of the cloud computing model. It means both users and suppliers are more closely aligned.
For software vendors that close alignment is where the opportunities lie; the old days of flogging fat, expensive licenses are over and the successful sellers of computer programs will be quicker and nimbler.
The CIA has been accused of formenting many revolutions around the world, this is one most business owners should be happy about them leading.