I was typing up a response to something that Geof commented on when I realized that I have missed a paradigm shift that happened, very subtlely, in the technology business in the past year. The move to subscription services; suddenly it is everywhere.
Microsoft Office Live, XBox Live (360), MMORPGs, Symantec Anti-virus software, .Mac, the list goes on and on.
It was as I was typing that I realized the age of applications is dead. Microsoft is relying on 360 Live to help sell the Xbox 360. In fact, one can not read a single review of the system without online Live play being mentioned; it is an integral part of the system that contributes greatly to gameplay and system impressions. You can bet that game developers get a piece of montly fees for online play. Any new game that does not create an online community will suffer as it becomes an obvious requirement.
Microsoft is slowly moving the Office platform over to a services model as well. This is the slap across the face to everyone as Office represents nearly 40% of company revenues and if Microsoft is trying to move to a much more subscription/service based model you can bet that many others will follow.
The other shift that is facilitating this change is the slow emergence of broadband everywhere. Wireless, wireline, and technologies as yet undiscovered are all pushing to make the web a more viable delivery system. The ironic part of this move to services is that computing is collapsing back down to the server and thin client model again; after almost two decades of pushing out to desktops the Gnab Gib is happening. The technological advantages are easy to spot: a single repository of data, a single application install location, the ability to roll out upgrades in a single location. It's a very long list of benefits for low cost -- high bandwidth is the main barrier to entry.
If the 10 million(!) dollar investment in the little web start-up Meebo demonstrated anything it is that online, web services are being watched closely by venture capitalists as the next big medium. So, my advice to anyone listening would be as follows: look to how you can get reliable, recurring revenue.
The three R's are going to be big in the next few years.
