www.aspnews.com/analysis/analyst_cols/article.php/1002731
By Phil Wainewright April 2, 2002 ASPs that outsource and manage traditional packaged applications got a welcome boost last week from the announcement of two new reports from market research firm IDC. Back in the good old days of 1999-2000, there was no shortage of analyst reports predicting that the ASP market would rapidly boom to be worth twenty-something billion dollars by somewhere between 2003 and 2007. When the bubble burst, all those reports were quietly shelved and forgotten. But now the first of a new crop of projections has arrived. (See The Future Looks Bright for ASPs.)
Application management, which a lot of ASPs are starting to offer as an on-site complement to their hosted ASP offerings, will also top $20 billion in the same timeframe, according to the second IDC report. So the future apparently looks bright for anyone still standing in the ASP sector with strong application management skills.
Location, Location, Location The theory makes sense, but it depends on software vendors adopting that new architecture, which they haven't been prepared to do for a whole range of reasons. Meanwhile, back in the real world, ASPs have still had to pay their bills while waiting for the change to happen. They have been obliged to tailor their offerings to what vendors have made available and what the market has been willing to pay for. A handful have found success through creating their own Web services-based applications, but even many of these have ended up delivering installed solutions because of customer reluctance to accept applications delivered as a service.
End of the Innocence An example of this viewpoint comes in the form of a white paper launched last week by British ASP iRevolution, in which its CEO Eamus Halpin sets out his views on the future of software delivery. Briefly promoted as iFuel, and before that as Integration, iRevolution has five years' experience of delivering ASP services, and over ten years' experience as an IT solutions provider for small and mid-sized businesses. In his paper, which is downloadable from the company's website, Halpin confirms that there is a market for outsourced and remotely managed applications, but he also explains why the limitations of conventional software packages restrict the scope of that market. He goes on to set out his views of how software will evolve into a more loosely coupled, distributed component model based on XML and Web services, which will deliver software to local devices while managing the applications and data centrally. This vision of the future happens to coincide with the concepts set out recently in a report from the Yankee Group (see Yankee Group Predicts Shift in Application Paradigm). The Yankee report portrays a new generation of software that operates locally but is managed centrally: "Web services and TCP/IP will be the glue that binds localized processing with centralized services (such as storage, authentication and security)." The good news for ASPs is that this new generation of software will require exactly the kind of network-savvy application management skills that ASPs have learnt in abundance through their experiences of delivering hosted applications. But those skills will need to be tuned to the highly componentized and distributed architecture of Web services, rather than the tightly integrated format of conventional packaged applications.
Rearchitecting the App
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