 |
Application Service Providers
Application Service Providers deliver software applications
over the internet for use usually with a monthly subscription
or a pay-for-use billing. The evolution of server based software
that does not need any software installed on the individual
computers and the increasing bandwidth that allows for these
applications to operate with good speeds has led to this service
that is growing in popularity.
The application service provider or ASP model is being offered
by a number of traditional business software vendors including
the ERP and CRM providers such as SAP, Oracle, PeopleSoft, Siebel
and others. These vendors are finding it a good way to cost-effectively
address the smaller needs of small and medium business enterprises
(SMB or SME) through the ASP route. The ASP model is also known
as hosted applications and does not involve installation, implementation
or expensive services to be done for the user organization.
Most hosted applications offer a good level of customization
and configuration that a trained software administrator can
do using the tools provided by the software.
The ASP route is now being called on-demand computing and is
being promoted as a means for easier management of software
by companies. Software and computing infrastructure as they
become an integral part of business operations and organizational
processes also involve maintenance and administration and these
are expensive to do. There is also the continuous upgrade of
technology and obsolescence that needs to be addressed.
The ASP framework eliminates all of this. The infrastructure
is provided by the service provider with the software. The ASP
also upgrades the software and improves it continuously to meet
the demands of its customers. Technology upgrades and maintenance
of the software are part of the service cost. The ASP ensures
uptime and required administration and support for the software.
The ASP could also have a helpdesk to address user problems
that come up during the use of the software.
A very large benefit of the ASP model is that the user organization
will keep gaining from the inclusion of best practices and improved
functionality in the software as the ASP gathers experience
from each additional installation involving another user organization.
The user organization while getting these benefits has to give
up some privileges that it might want to retain. It will no
longer own or license the software or have any ability to modify
it. The data and application will not reside in its own premises
and will instead be outsourced completely to another organization.
Some user organizations might feel threatened by the possibility
of their business data being tapped. Internet connectivity might
need to be provided to all users in the organization to use
this ASP model.
One area that the ASP model needs to address is application
integration. If a user organization is going to lease out applications
from several ASPs, each having competence in a specific area,
there needs to be a method to ensure seamless data transfer
across these applications and an unified interface that allows
the user to view data across these applications. The evolution
of XML, the Business Process Definition Language and the web
services technology framework are aiding this interchange of
data among applications. This will take a few years to establish
well for the comfort of the user but the direction and feasibility
has been set.
These are however small compromises that need to be made to
avail of a larger set of benefits. If telephone exchanges, telephone
and mobile systems, power, cable television and even email services
can be outsourced, then business applications should also deliver
larger benefits when outsourced cost-effectively.
To address the larger requirements of companies and provide
integration across applications, a few companies have set themselves
up as ASP delivery providers. These companies have setup infrastructure
and promoted, invested or partnered application vendors to offer
applications to customers. These ASP delivery providers are
also now working on application integration to ensure that they
are able to offer a larger and more complete business offering
to their customers.
The ASP and on demand computing movement will gain momentum
in the next few years as higher bandwidths at lower costs propel
companies to use them more. Application service providers will
also expand their offerings to make it more viable for companies
to use them through better functionality, better technology,
architecture and upgrades, improving best practices and cost
effective pay-for-use billing models.
What the ASP model also offers is instant fulfillment and the
ability to move from one service to another with the only cost
being data migration. Software and information systems will
soon be yet another service that one subscribes to like a newspaper
or a telephone.
Global Leaders in Application Service Providers include
|
|
Jamcracker |
|
|
LoudCloud |
|
|
GrandCentral |
|
|
Salesforce.com |
|
|
|
