An Introduction to Application Service Providers (ASPs)

Application Service Providers ( ASP) provide software which you run over the internet through your browser rather than on your local PC/network. Simply put, it is a form of outsourcing (the distinctions between the two are becoming more blurred) and in some ways it is the same as old service bureaus but with modern technology. But with many applications now available as ASP software and with the likes of Microsoft showing commitment to it, ASPs must be taken seriously.

Overview

Software that most people use is bought and installed on their own PC or network. With software provided by an ASP, the software instead resides on the provider's computer and you access it through the internet through your browser. And you 'rent' the software, for example paying a monthly charge, rather than buying it outright. Your data is also likely to be stored on the provider's disk space.

Benefits of ASPs

• Pay-as-you-go:

  An ASP will be likely to charge you a monthly rental which can help spread the costs.

• No 'extras' needed:

  You won't have to pay for specialist/expensive hardware, specialist IT support staff or system development. Software maintenance and upgrades may also be included by an ASP.

• Access:

  Connectfrom anywhere in the world with an Internet connection and a browser.

• Use existing hardware:

  You can run the software on your existing computer and browser.

• Up-to-date technology:

  The ASP will be investing in its equipment and software.

• Time to Market:

  Faster deployment/Ease of set-up.

• Potentially suitable for all size organizations:

  If the ASP charges depend, for example, on the size of a database then a small charity may be able to afford to use the software. Whereas, the cost of some large and more expensive software can prohibit the use by smaller organisations.

• "Total Cost of Ownership" (TCO):

  If you buy software you need to weigh-up all the costs of buying software along with any related hardware, maintenance, upgrades and so on. Renting software through an ASP may be cheaper.

Possible Problems

• Performance:

  If you have a dial-up modem then the speed is unlikely to be satisfactory for all but the most basic applications. You need to be looking at ISDN, ADSL or leased lines for good performance, all of which cost more. Communication costs. The on-going phone/leased line charges. And the likelihood you will need ISDN lines or faster , and the costs for that.

• Continual payments:

  If you stop paying your monthly fee then you won't be able to use the application any more, whereas with software you buy, once you have bought it then it is yours to keep. (It might also be the case that after some time you will have paid more by renting the software than you would have done if you had bought a package, but this depends on each situation, and you do need to consider the TCO).

• Not having data in-house:

  This is probably a conceptual issue rather than a true disadvantage but it might be important to some organisations. In many instances, to all intents and purposes, you can use your data in the same way as if it was in-house. It does mean you are reliant on the ASP ensuring their hardware is always available and you should discuss how they manage possible hardware failures (and fault tolerance). See also issues on Security below.

• Communication breakdowns:

  It is possible, although more unlikely these days, that you could find you are unable to connect to your ASP if there is a problem with your communication links.

• Security:

  Both in terms of having your data held away from your offices and as far as stopping security violations of your communications links. At the extreme, you have to decide if you would be happy running a 'mission critical' application through an outside organisation.

• Training:

  How will you be trained on the software?

Microsoft and Web-Based Software

Microsoft have a project called .Net (previously known as Next Generation Windows Services). It includes a set of development tools including C# (C sharp), a new programming language to compete with Java, and a new operating system, Windows.Net. They are committing heavily to this project. Although industry analysts are split in their views on this approach (and much might depend on the anti-trust court case and whether or not the company is forced to split in two), it shows just how powerful the benefits are which ASP vendors are bringing to the market and how the industry could well move forward.

One of Microsoft's main plans is the conversion of Microsoft Office to an on-line service. Office 2000 is already available in a more "crude" form (e.g. Personable.com ) but with its re-writing it will be designed especially as an on-line product and re-launched as Office.Net.

Application Hosting Services

Another interesting development within the structure of ASPs and Outsourcing is Application Hosting. This is where a specialist company will host a software package on its server and enable another organisation to run that software as if it was on its own in-house server. (Such companies may well be a third party company and not the original software house/vendors). This thus offers all the benefits (and possible drawbacks) of ASPs but also widens the scope of ASP software by introducing more packages. The main (possible) difference between "classic" ASPs and Application Hosting companies is that such a company's customers will not necessarily access their programs over the Internet, and leased lines/ADSL technology may well provide an alternative approach.