Application Service Providers

Introduction

• Application Service Provider or (ASP) has a significant placement in the business world.

• ASP provides customers with access to business application via Internet connection.

• This has become more popular over the past few years and is still one of the most functional methods for IT outsourcing.

Overview

• The ASP operates and maintains the equipment that run the application and also employs the people needed to maintain the application.

• Most companies pay a monthly or yearly cost for the services.

• For example, most of us pay for the use of an Internet Service Provider which gives us access to the Internet and e-mail. This is a prime example of an ASP.

ASPs in the Market

• Businesses of all sizes benefit from the use of ASPs for web hosting service and email.

• Especially for small businesses and startups, the biggest advantage is low cost of entry and short setup time.

• Plus the pay-as-you-go model is often significantly less expensive for all but the most frequent users of the service.

IT roles and ASP customer Roles

• It’s Typical Roles ASP Customer’s Roles• Plan Investments Specify application services needs• Build facilities Budget service costs and return on

investment• Hire and train people Contract for services• Budget and track expenses Focus on your business, not IT• Select and procure systems• Select, procure, and test software• Work with vendors and providers• Hire integrators and consultants• Organize and define processes• Install systems and software• Develop software• Customize packages• Maintain systems and applications• Provide user support• Run the data center• Plan for the future

Advantages of ASPs

• There are several advantages to using ASP’s. It will reduce their spending and the costs of keeping systems up.

• ASPs also offer superior technical support which may be reason enough for most businesses.

• All of this, for the most part, at a very low cost to the customer.

What Vendor?

• Major application vendors have focused both on the Business Process and Outbound and Inbound Logistics.

• These applications are functionally stable, businesses believe they could afford the long development cycles.

• Because they are expensive and mostly big, only wealthy business customers could afford them.

Examples of ASPs• A Web hosting company - Companies like Verio and WebHosting.com provide a

classic ASP scenario -- virtual Web hosting. These companies provide hardware, software, bandwidth and people to host Web sites for companies and individuals. Typically, they charge something like $15 to $30 per month for the service, and may host hundreds of accounts on a single machine.

• An e-mail provider - A Web hosting company usually provides some sort of e-mail service with your Web hosting account. There are two other alternatives: – Free services such as Hotmail or Yahoo! Mail – E-mail server ASPs who run exchange servers, POP servers or IMAP4 servers and distribute

them on a monthly-fee basis - For example, a company in the Raleigh area called Inter-path offers a complete e-mail solution at a rate of $8 per month per account (as of 4/10/2000).

• The advantage of the second approach is that the e-mail address uses your company's domain name.

• A fax providerE-fax provides a free fax service that delivers faxes to your e-mail box. This is a classic example of a free ASP.

What to Ask• How do customers access the software?

• How are customer service issues resolved?

• How secure is the data?.

• How secure is the connection between the ASP and the user?

• How is the application served?

• How does the ASP handle redundancy?

• How does the ASP handle hardware/software problems?

• How does the ASP handle a disaster?

• Who owns the data?

• How can I get the data out if I choose to select a new ASP two years from now?

• How can I move data between existing applications and the ASP?

Conclusion

• The future of ASPs and their influence ,on anyone who is involved in IT and networking industries, is hard to envision.

• However, there are going to be many interesting advancements to come with the industry and how it will be used and sold.

References• http://www.howstuffworks .com • http://www.microsoft.com • Factor, Alexander. Analyzing Application Service Providers.

2002. Prentice Hall. Palo Alto. • Rowe, Stanford. Telecommunications for Managers. Fifth

Edition. 2002. Prentice Hall. Uppers Saddle River. • Weiss, Peter. They Do More Than Just Save Money.

Information Weekly. Nov 2001, Issue 862.