One of the things that held back application development in the enterprise has been the cost of setting up and managing the infrastructure for the development and testing environment.
But with recent advances in virtualization and cloud computing services, the cost of developing custom applications has dropped significantly. Virtualization allows IT organizations to quickly provision servers to develop and test applications without having to actually set up physical servers. Cloud computing is now taking that one step forward by letting developers create development and testing environments in the cloud.
To that end, Microsoft will soon deliver tools to help manage the application development process on virtual platforms. In so doing, Microsoft will be catching up with offerings from VMware and VMLogix, which has an OEM relationship with Citrix. As these management platforms evolve, it's becoming clear that a hybrid application development model is going to evolve where parts of the application are developed locally, while other elements are developed on a cloud computing service.
What all this should mean is that as it becomes simpler and less costly to develop custom applications, more businesses should be looking for software to provide competitive differentiation. After all, one of the arguments brought forth in the book "IT Doesn't Matter" by Nicholas Carr is that one of the biggest issues that business people have with IT is the lack of competitive differentiation once everybody adopts the same technology. The only way to maintain a competitive edge is to create some form of a custom applications or extension to an existing application that rivals don't have.
Unfortunately, budget constraints have been a limiting factor when it comes to building custom applications. So the question now is: As the cost of developing custom applications drops, will your organization become a lot more interested in building them?