Bits Are Better Without the Box

Peter Coffee: Delivering software updates and new applications online saves money and time.

You work all night to finish the code, it passes the final regression suite, its just what your users need—and what the smart ones even knew enough to want.

Then you send the bits out to be frozen on plastic, stuffed into packages, schlepped onto trucks, rolled into big aluminum tubes with wings and wheels, and eventually wafted on fumes of kerosene and gasoline to the in-box of whoever signed the order for your software. If youre lucky, the people who need it might actually have it next month. Whats wrong with this picture?

Electronic fulfillment of software updates, and even initial orders, is clearly The Right Thing. It wont be a flip-flop transition: "Were talking about a dimmer switch for physical fulfillment, not a great big Frankenstein switch that gets thrown and suddenly changes the whole world," said Senior VP Dave Dunlap at Intraware when we spoke at the end of last week. But the path is clear, with the Aug. 12. announcement that Intraware will partner with Zomax (whose process management business currently includes a healthy chunk of CD and DVD mastering and duplication) to include Intrawares SubscribeNet service in Zomaxs offerings. "They realized that the future was not paved with CDs," said Dunlap of his conversations with Zomax before this deal was made.

When you look at the proposition from many angles, there are many advantages to electronic distribution that are not immediately obvious. For big-ticket software purchases in the tens of thousands of dollars, Dunlap noted, sales taxes can add up to a lot of money: There are 15 states, by his count, that charge sales tax on physical products but that dont consider electronic fulfillment to involve a tangible product. Electronic fulfillment can therefore amount, in effect, to a sizable price reduction.

For software sellers who want to get products delivered before the end of a quarter, Dunlap added, theres a big difference between 48 hours for physical transfer and six seconds for the SubscribeNet operation that makes the software "available in usable form"—to quote the accounting guideline—so that revenue can be recognized on ones books. "Weve had some massive orders come through in the last 15 minutes of the quarter," said Dunlap while politely not naming names.

Costs of software support can be greatly reduced by eliminating a large fraction of the "Where is my order?" or "When can I get an update?" calls: A service such as Intrawares SubscribeNet advises entitled customers, proactively, of when and where new software or updates come on line.

Finally, theres real pressure from the marketplace to shorten the cycle from identification of software issues—especially security problems—to resolution in the field. Security gadflies are turning up the heat on major software vendors to get security fixes into users hands, right away, or risk pre-emptive publication of exploit code. Critical data must be exchanged, in large volumes and in a timely fashion, if coordinated responses to security threats or other post-9/11 concerns are to be effective.

Anyone who writes code may feel that electronic distribution is logically a roll-your-own proposition: How much work can it be to set up an FTP site and an e-mail distribution list? I suggest that this makes about as much sense, though, as having Ferrari build its own transport trucks to deliver its high-performance cars to dealers, just because the basic technology is the same.

There are distinctive competencies in managing entitlements, handling high peak-to-average ratios, and meeting other technical challenges to make electronic distribution practical for software images of tens or hundreds of megabytes. As the necessary final step in application development and deployment, electronic distribution belongs on every enterprise IT agenda.

Tell me how you get your bits to market.