Weekly Review: Real Time is Right for ASPs

How do you define an ASP these days? Experienced ASPs, reacting to the needs of their customers and the trends they have found in the market, have subtly shifted their offerings in various ways over the past year or so. The result is a variety of hybrid business models that defy easy definition.

Read and React

"ASPs are adding characteristics of other participants in the market, respectively those of MSPs, ISVs and SIs. The corollary is that members of each of those sectors will increasingly take on the characteristics of ASPs, as the entire tech industry converges on real-time service provision." Give us your feedback on the ever-evolving definition of an ASP in the ASPnews Discussion Forum

Calling them hosted applications providers no longer adequately captures the essence of what ASPs do. Application hosting is something that outsourcers and hosting providers do, too (if you don't believe me, look at the last week's announcements of full-year results from outsourcing giant EDS or top managed hosting provider Digex. Both have significant revenue streams from providing managed application hosting.)

While managing hosted applications remains a core skill for ASPs, the key ingredient in what ASPs do is real-time service provision. It is not merely the fact of hosting an application that defines an ASP, but the manner in which the application is provisioned.

Those ASPs who intend to survive in today's market therefore need to master a range of online application management skills. They need to find ways of extending and deepening real-time relationships between themselves and their customers. Three current news stories illustrate the three different methods ASPs are adopting to meet that challenge.

Adding Real-Time Remote Management
USinternetworking last week became the latest enterprise ASP to add remote management services to its portfolio. The days when an ASP could successfully target the enterprise market without having some kind of management services provider (MSP) capability seem to have passed.

Some customers aren't ready to move to a fully hosted model yet, so having an MSP offering like the one USi introduced last week becomes a way of starting to build a relationship of trust between provider and customer. Others are making the move to external hosting at the same time as upgrading to a new version of the application, in which case a smooth transition often depends on remote management of the installed software prior to the upgrade. Even when the hosted application is a completely new implementation, there are still likely to be integration requirements with in-house systems that create a need for the ASP to have at least some remote management capabilities.

Other ASPs add remote management by partnering with MSPs, but since many MSPs lack the application-level management skills that differentiate ASPs, the ASP usually ends up having to acquire remote management skllls of its own anyway.

Offering Real-Time Packaged Software
In an ironic twist of fate, a surprising number of ASPs are finding themselves becoming ISVs (independent software vendors). Having set out to move software out of the enterprise into their own data centers, they have ended up packaging their accumulated integration and management skills into software of their own — and now they're putting back inside their customers' data centers.

ASP aggregator Jamcracker is a topical case in point, as it readies the launch of a new, installable version of its online application and Web services integration platform today (Tues Feb 12th).

Jamcracker has assembled the fruits of all the product development and practical experience in online service integration that it has gained over the past two years, and is now delivering it as a package that enterprises can choose to install. Alternatively, customers can choose to have Jamcracker host the package as a service. But this is software with a difference. In either case, the provider will remain closely involved in managing and developing the implementation, adopting a "service-assisted" real-time ISV model, in which it remotely manages installation, upgrades and troubleshooting of packages installed on customer sites.

Jamcracker's timing, by the way, is immaculate. The formation last week of the Web Services Integration (WS-I) industry consortium was a response to the absence of standards that exist today for integrating Web services. Until such standards begin to emerge, the only way to achieve smooth integration is by proprietary methods such as Jamcracker's newly launched platform.

Becoming Real-Time Integrators
The online model requires a new breed of systems integrator (SI), one that the established SI community has proven ill-equipped to deliver. Online applications and service offerings need to be responsive and adaptable, which means they can't be created using a traditional project-based model. They are a never-completed work in progress, requiring continuous, real-time systems integration services.

ASPs who focus on delivering private-label ASP solutions that they operate on behalf of their customers are at the forefront of developing these real-time SI skills. Interliant is a case in point. The latest version of its INIT Host platform, launched last week, provides a flexible framework for providing custom ASP solutions that enterprises then offer to their small business customers under their own brand.

The enterprise acts as a virtual ASP, taking care of relationships with its end customers, but leaving the operation of the solution to Interliant. In Interliant's relationships with its enterprise customers, the provider is a real-time solution provider, not only building but also continuously maintaining and enhancing the solution to adapt to changing market conditions.

Converging on Real-time Services
All three of these separate approaches share the common theme that ASPs are adding characteristics of other participants in the market, respectively those of MSPs, ISVs and SIs. The corollary is that members of each of those sectors will increasingly take on the characteristics of ASPs, as the entire tech industry converges on real-time service provision.

It is ASPs, however, who already have the all-important real-time skills. In an increasingly online, real-time world, those skills increase in value day by day.

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