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By Mark E. Hill, Chairman, BlueLock,
a VMware vCloud Express Service Provider Partner

In 1999, the Internet hype
was nearing its peak and I was running a successful software company serving
the banking industry.  We had
plenty of happy customers and we were making money.  But, I felt like the press and market analysts were ignoring
us because our software ran on Windows using a client-server model.  We were not part of the Internet “revolution.”   

I saw that the software
industry was at the beginning of a big movement from a client-server model to
the Internet and I began to develop a strategy to leverage this new Internet
infrastructure, essentially a low-cost public network, available to everyone.

We first looked at a
workflow tool we were already developing to process small business loans.  We decided to build the application
centrally to run on our servers and let our customers access it via the
Internet.  The idea was not
revolutionary, just a natural evolution. 
Our banking customers were already used to outsourcing all their
software and accessing it via private communication lines.

Over the next couple of
years, many companies executed along similar lines and a new name appeared,
Application Service Provider (ASP). 
Salesforce.com proved the validity of the model on a grand scale.  Today, thousands of companies deliver
what has become known as Software-as-a-Service (SaaS).  Many companies that have adapted to SaaS
enjoy a strong competitive and financial advantage over their competitors.

At the time, it became very
clear to me that the software business as we knew it was going to change.  Ultimately, software would be delivered
via the Web.  We had a thousand customers
using our Windows software with tens of thousands of users.  The databases were very large and
entrenched.  The process of
delivering new versions included sending physical media to customers who had to
install, test, run conversions, and retrain users.  It was very inefficient.

By running software on our
servers, we could manage the updates and conversions and keep our customers
up-to-date, at a fraction of the overall cost.  The lowered total cost of ownership, along with improved
user satisfaction and productivity, changed the nature of how we delivered
value. 

Just as the SaaS model
became clear in 2001, today, in 2010, it is clear that the way companies deploy
IT infrastructure will change dramatically over the next 10 years.  Hardware is following the same route as
software.  There are “clouds” on
the horizon. And that’s what I want to talk about in my next two blogs. In my
second blog post coming shortly, I’ll look at Infrastructure-as-a-Service
(IaaS). Stay tuned.

 Bluelock_hill

Mark E.
Hill is Chairman of BlueLock’s Board and Managing Partner of Collina Ventures.
Mark co-founded Baker Hill® in 1983. Focusing on the banking industry, the
company built software solutions focused on small business lending. In 2005,
the company was acquired by Experian® (EXPN.L), a global information company. In
addition to his roles with BlueLock and Collina Ventures, Mark serves on the
board of numerous companies, including Interactive Intelligence, (Nasdaq:ININ), 
Cantaloupe TV (www.cantaloupe.tv), and
T2 Systems (www.T2Systems.com).