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Marimba CEO: Net as global utility

The Internet could soon deliver home banking to consumers or update software on corporate networks, Kim Polese says to the SPA.

SAN JOSE, California--The Internet is poised to become the worldwide utility, a medium that can deliver home banking to consumers or update software on corporate networks, Kim Polese, CEO of Marimba, told the Software Publishers Association today.

"But before the Net becomes a true utility, it needs to be made transparent," she said. "It's got to be as easy as watching TV and switching to another channel.

"We must get out of the mind-set that the Internet is a PC and a browser and get into the view that it's delivery of a service," she said. "Leveraging the technology is key."

She believes that subscribing to software applications rather than buying them will be commonplace in 18 months, with subscriptions including updates, bug fixes, and upgrades. But she admitted after her talk that pricing for handling applications in this way remains undefined.

"What the software industry needs badly is a services mode based on the Internet to give publishers an ongoing predictable revenue stream, with lower support costs," Polese said. "Software becomes a service extended to you via the Internet, with dramatic implications for the software industry."

Revenue models will include leasing applications, rent-to-own, trial subscriptions, and pay-per-use. Publishers will be empowered to bypass resellers and distributors, though they may continue to use the channel too.

As harbingers of the new Net-based services model, she highlighted distributor MicroAge realigning itself into two pieces, a traditional distribution side and an integration ad services unit. Distributor Ingram Micro has announced its move into build-to-order PCs, a concept pioneered by Dell Computer.

"We will see but customized software delivered to individual users in segments--highly tailored, constantly updated, and subscription-based," she predicted.

Service bureaus, often through telephone companies or ISPs, will spring up to handle the updates, Polese said, noting that US West has announced such a service. Enterprise applications companies like Baan and SAP will take advantage of the new model, she predicted.

Marimba creates software to handle those kinds of updates over the Internet, and it has partnered with IBM's Tivoli unit, which has software that manages that kind of distribution inside corporations. Marimba is sometimes dubbed "the Tivoli of the Internet."

"Already, competition is driving demand of such services, but the major issue is the difficulty in deployment," she said, arguing that such services cannot be distributed through a browser or a floppy disk.

Using the Internet, rather than client-server architectures, compresses the time required for such deployments from months to hours, she said. However, browser-based services require users to wait for downloads of new software, while Marimba's technology pushes updates out to users.

"All the information should be maintained in the application. The application needs to be smart enough to be controlled when it's plugged into the network," she added.

The first step toward the subscription model is to embed the enabling technology into an application, which a number of companies, including Vantive, are doing now.

But pricing and revenue models remain largely undefined.