The patent application isn’t exactly the 1-Click kerfuffle reprised, but one that seems to cast Amazon as a service seller instead of just a product seller.
Friday night is not a nice time for certain people to stuff a patent application into the Internet for journalistic commentary, etc. Lucky are we, the few, the proud, the scribes, feeding the ever-hungry maw of the World Wide Web.
Anyway. In abstract, Amazon seeks to patent a method of offering an electronic marketplace to bring together buyers and sellers of Web services. That marketplace would present the services and process payments rendered by buyers to sellers. Sounds a little familiar to this writer, who must state in fairness that he has been a happy Amazon customer ever since Mr. Bezos started stuffing books and foam pellets into boxes ten years ago.
Hosted services were all the rage several years ago. Why deal with the support issues and other costs associated with bringing a service in-house, when it could be hosted by someone else and used on a subscription basis?
It sounded like a good idea, but not very many people found themselves working on client/server versions of Microsoft Office, or anything else. Then, as prices for components like memory and hard drives decreased, computer prices dropped. Businesses could afford to pickup a server and buy a copy of a software product outright, and host it themselves.
A funny thing happened to the software industry over the past five years, particularly to everyone’s favorite Washington company. Businesses, both big and small, decided they didn’t really need to upgrade to the latest and greatest version of a product, bless their tight little fists.
Employees muddled through, working on Office 97 on Windows NT workstations, scraping every bit of performance they could out of their Pentium machines (no 2, 3, or 4 there.) Workers hated the IT people because the applications were slow, the IT people hated the corporate tightwads who wouldn’t budget for upgrades. Somehow at the beginning of every new fiscal year, they still found money to take executives and managers to work-focused destinations and brush up on their synergies over drinkies on the 19th hole.
Meanwhile, the Microsofts and every other star in the technology solution universe could only look on while their multi-million dollar advertising budgets failed to compel enterprises to buy, buy, buy. What had been a periodic freshening of the revenue stream every 18 months began dragging into years. Not good.
Then, Bob Metcalfe, the guy who invented Ethernet and founded 3Com predicted someday people would pay to send email. Ho ho, good one there, sir. But some people who heard the joke may have looked a little deeper into its abyss and thought, “he’s onto something.”
Suddenly, software solutions were being developed that “required” only the most current technology available. Office 97 had to go because insert-product-name-here only works with Office 2000. And Office 2000 won’t run on ancient hardware, you’ll have to purchase some new hardware along with shiny new Windows operating systems (and licenses) on-board.
That shift in development has lead to rediscovery of the client/server subscription-based model for software. Salesforce.com has made a business out of it, Microsoft has a hosted option planned for its CRM 3.0 software as well. Other companies offer to manage Exchange servers for businesses, guaranteeing a level of spam and virus protection that would require considerable investment in-house.
We’re not quite at the point where everyone will be renting subscriptions. But we’re sitting on the edge, watching software companies debate within themselves if it’s time to take the plunge and ensure themselves an ongoing stream of subscription revenue, if only they can find enough buyers.
That’s where Amazon’s patent comes into play. By putting a brand name and a recognizable web face on a market containing hundreds of eager service purveyors, that barrier to entry might be lowered for the web service market. People buy what they trust, and ten years of developing brand recognition, plus an approved patent, might be all Amazon needs to cash in on the next big thing.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
