ASPs, BSPs and E-Hubs Work Together

The recent split of self-proclaimed "BSPs" (Business Service Providers) from the ranks of "ASPs" (Application Service Providers) highlights the divergence in value propositions and market positioning that net-hosted service providers now bring to the market. As business and IT professionals struggle to craft flexible-state-of-the-art e-business strategies, ASPs and BSPs along with e-hubs - net-based vertical market trading hubs such as Chemdex or Metalsite - are all candidates for filling part of the need. Few if any are capable of delivering all the functions necessary to quickly transform a major existing enterprise into a fully functioning e-business.

Nervewire's own scenario-based analysis of the ASP market indicates that the initial ASP offers of "standardized, one-size fits all templated applications" lack appeal for increasing numbers of customers. Offered on a stand-alone basis as an outsourced alternative to traditional IT computing solutions, they are a non-compelling value proposition. What gets e-business managers and their IT advisers to take notice is the ability to solve business problems quickly, using scalable, reliable, cost-effective IT resources.

ASPs can provide quick, affordable access to IT infrastructure and operational expertise but they rarely address business workflow or inter-company market exchange requirements. BSPs address business process issues and offer the opportunity to outsource whole business functions. E-hubs provide secure trading environments to link with external buyers and suppliers. ASPs sell to IT, BSPs sell to functional business managers and e-hubs sell to marketing and procurement organizations.

Unfortunately, all these systems and services need to share data and be accessed via a unfied interface if the customer is truly going to re-invent the way it does business. Back-end internal IT systems, business processes and external market activities need to interact seamlessly while sharing information on a consistent and timely basis. The trick to getting maximum benefit out of these new net-based service providers is pull all three interests groups and capabilities together into a seamless e-business solution.

To date, getting this to happen has required complex internal partnerships between IT and business managers or multi-million-dollar contracts with third-party legacy integrators. The problem with both approaches is that they rely on customized integration across systems and services. Bringing an ASP component into this type of environment could actually slow down an e-business transformation effort. There is a better, more appealing way for ASPs to play.

Rather than rely on customers or integrators to mix and match stand-alone, best-of-breed solutions or even application suites, we believe customers will seek out strong, net-based eco-systems of ASPs, BSPs, and e-hubs. They will have pre-developed mutual service level agreements, shared meta-data models, and common interfaces. We expect these eco-systems will include third party data centers, network service providers and e-business strategy and implementation firms.

Tight eco-systems will differentiate themselves on the quality of the end-to-end user experience, and on service levels that reflect the reliability of information flow across organizations, trading partnerships and business processes. Eventually, standards may enable these eco-systems to be more loosely coupled, but, for the near to mid term, moving at Internet speed is likely to require tight alignment across ASPs, BSPs and e-hubs.

Working together, these new service providers can accelerate the pace at which organizations of all sizes shift to net-based information and e-business services. On their own, each addresses only a piece of the total customer requirement.

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