Maybe I'm missing something, but I don't see the point of proprietary network services (or cloud computing, or Software as a Service, if you prefer). Not when you have Free software as an alternative (Free, in this case, being analogous to open source or GNU/Linux).
In fact, proprietary network services strike me chiefly as a way to offer the incidental features of Free software without the provider giving up control. But in the last year, I'm glad to say, this dodge has started to become less tenable, as Free software has started to focus on network services.
Oh, I understand why developers might have enjoyed the idea, back a couple of years ago when network services were new. I may not be a developer myself, but I understand how the challenge of the delivery model might add interest to your work, at least before it became commonplace.
Nor would I suggest that network services should never have been developed. Diversity never hurts, and if a technique is plausible, someone is going to develop it. I accept that.
What I have trouble understanding is why proprietary network services are attractive to clients when Free software offers the same advantages and more. You want software that doesn't cost you anything? Free software offers that. You want to have the same software available, regardless of the computer you're using, and not have to worry about whether your licenses allow you to install on additional computers? Free software can do that. Reduced support costs? Hook up to the free software community, and you'll probably find a mailing list that does that.
How about centralized bug-fixes and updates? Through the repositories and package management systems of Free operating systems, Free software offers those, too.
If anything, locally-installed Free software has substantial advantages over network services. Some network services, such as Zoho and Google Apps, either have or are developing offline modes you can use when your Internet connection is down, but many still do not, making them less useful than any local application.
The same is true with privacy concerns. Although encryption is starting to be offered by some network services, not only can you do far more to secure your data on a local network or workstation, but, with Free software, you can scrutinize the code and satisfy yourself that no back doors exist for intruders. You don't have to trust the provider, because you can take steps for yourself.
Just as important, many network services have fewer features than their local counterparts, particularly those for office productivity. No doubt part of the reason is that local applications are more mature, but another seems to be that Web apps jettison features in the interests of faster transmission. As a result, network services can be especially frustrating if you're a power user, since many of the features you rely on for speed and efficiency simply aren't available in them. Frankly, given a choice between ajaxWrite and OpenOffice.org or ajaxSketch and the GIMP, who in their right minds would choose the Web app?
Surely nobody with serious work to do. Such choices would be like insisting on working in a text editor or a paint program when more mature applications are available.
The only reason I can see for clients preferring proprietary Web apps (aside from the fact that they're trendy) is that software as a service is less of a stretch for the average managerial mind than Free software. Even today, many find the idea of Free software a challenge to standard business practices, because it requires rethinking software procurement, supplier relationships, and, at times, existing business models. By choosing network services, a convention-bound company can often get the use of cost-free software (just as they could with Free software), but without having to worry about any of the mind-stretching aspects that go along with it.
Besides, outsourcing services is something that modern businesses do all the time.
But the ones who really benefit from network services are the suppliers. Unlike traditional software providers, their support costs are lower because most of the maintenance is centralized. Even more significantly, they can protect their so-called intellectual property without adopting a Free license. Furthermore, they can do so while offering -- at least to casual or light users -- what many outsiders consider the dominant feature of Free software: Availability at no charge.
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