Merrill Lynch has come up with a model to track and evaluate the on-demand computing solution adoptions –
From their website :-
“The MLODI will serve as an objective measure designed to reflect the fundamentals of software companies as they make the transition to on-demand business models,” Jason Maynard, Merrill Lynch’s software analyst, said at the firm’s Software and Services Conference, in Santa Monica, California.
MLODI is intended to provide investors with a quarterly tool that tracks both the amount of revenue generated and solutions deployed via the On Demand model. The index will break down the software sector by sub-segments for applications, infrastructure, management and niche markets. MLODI will also utilize cash flow and booking methods in conjunction with traditional metrics so investors can better make relative valuation comparisons between companies that have different models.
The MLODI survey will incorporate results from the leading software companies in the industry, including Mercury Interactive Corporation, Grand Central Communications, and Oracle. The first results of MLODI will be published in early spring. ”
I wonder why they are not getting results from other two poster-child of the variable-cost bandwagon – SalesForce.com and IBM. It would be interesting to see how financial community dissects the numbers given to them by both public and private companies without making this a 50000 ft exercise.