January 26, 1998
Pay-per-use Software will crank up Internet commerce
By Bob O'Donnell
There's no question that business transactions on the Web is a fast-growing area. But I
think that there is also a consensus that Internet commerce isn't moving quite as fast as
predictions expected.
I think part of the reason for that is there hasn't really been that many compelling
reasons to buy online. Many online transactions, after all, are simply replacements for
what would otherwise have been a phone order to a mail-order company. The challenge is to
offer something online that is unique and different -- something that can't be easily
ordered over the phone.
One answer to this challenge is to sell information via the use of microtransactions.
Using a technology like Digital's Millicent,
which went into formal trial last week (and which I wrote about in a previous column,
it's easy to imagine a world where you might pay 5 cents to read this column every week,
for example, or a penny for every news story you read here or at other Web sites.
The problem with microtransactions, however, is that people have gotten used to getting
information for free and may balk at paying anything, even tiny amounts, for what they
consider to be public domain. In addition, the fear factor of not really knowing how much
you may end up spending each month could prove to be a major detriment.
A better solution, I think, is the notion of pay-per-use software available via the
Net, such as the impressive new PerformanceReview.com
site from KnowledgePoint. Pay-per-use software licenses have been around for a while, but
PerformanceReview.com, which automates the process of doing employee evaluations, is the
first example of which I've heard of a company using the ubiquitous network known as the
Internet to offer it on a wide scale. Essentially what the company has done is to convert
the technology from its existing stand-alone product into a Web-based application. It's
brilliant.
Here's the deal: You go to PerformanceReview.com, provide a credit-card number to
purchase a single use, or time-limited uses of the product, and then use the software by
simply filling in forms with your browser. In the background, the PerformanceReview.com
application builds an employee review based upon your input that, upon completion, is
mailed to you. Along the way it provides built-in help and enough customization options to
keep just about anyone happy.
I tried the Test Drive version (which lets you build a fake review for free -- for a
limited time, the company is also offering the first real review for free as well), and
was very impressed, both with the software itself and the concept. To me, this is the best
example I've seen of leveraging the reach of the Internet to offer a compelling online
product. It's also a tremendous way for the company to take advantage of its core
technology. If the service is well-marketed, I think it is bound to be a big hit.
Pay-per-use payment schemes don't work for all types of software -- you certainly
wouldn't want to pay for every time you use your word processor or fire up your browser --
but it does make sense for a lot of different applications, including employee
evaluations. In fact, I'm willing to go out on a limb and say that about 25 percent of all
the applications currently used by individuals in businesses would make sense to be used
(and paid for) on a per-use basis. Unless you do sales presentations for a living, for
example, how often do you really use PowerPoint, or any other presentation application?
How about conversion utilities, tax software, or even reference and entertainment titles?
The list of possibilities is endless (and a lot longer than many ISVs are probably willing
to admit).
Everyone agrees that the Web will completely alter our computing experience over the
next decade or so, but no one is really clear about exactly how it's going to do it. I
think pay-per-use software on the Web could prove to be one of the major changes that we
will all grow accustomed to.
Copyright 1998, by InfoWorld Publishing Corp., a subsidiary of IDG Communications,
Inc. Reprinted from InfoWorld, 155 Bovet Road, San
Mateo, CA 94402. Further reproduction is prohibited.
