On Demand Index

Filed in archive Technology on May 6, 2004

Jeff links to a Merill Lynch paper ((pdf) of the On Demand Index. On Demand may also be known as the ASP model to you. ML is trying to establish a standard to better measure the different accounting statistics from companies selling On Demand licences and classic licenses.

"On Demand is more than just a software notion. It is an expansive concept hat encompasses people, processes, and technologies. It has been a natural response to the restrictions of traditional IT. It just doesn't make sense to force someone to buy IT components, create processes, or hire people to support maximum capacity when the baseline level of required computing resources is much lower. Examples of this are big spikes in required capacity for payroll only
twice a month or additional resources for retailers are required during the Holiday period but not as much during the summer months. Customers want to be able to vary their investments to match fluctuating market demands --
On Demand."


"The flexibility of On Demand impacts personnel, enabling dynamic reallocations of talent to contain costs while delivering the same quality of service. Models have existed in this space for some time in the form of temporary staffing services, but with the Advent of communication and interoperability standards, On Demand personnel has moved into higher value roles. The entire concept of outsourcing IT roles to India or China is a very visible example of the powerful attraction of On Demand concepts in the labor market."

Quite interesting and definetely a market to watch...