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Weekly Review: Web-Native ASPs Cheer Web Services By Phil Wainewright October 8, 2002 The biggest obstacle blocking the early progress of Web-native ASPs was not security, financial stability or general customer distrust of the model. Although each of these were significant barriers to adoption in their own right, the most serious roadblock has been integration with other applications. Read and React "Web-native ASPs like Salesforce.com, NetLedger, OpenAir and others were confident that the Web-native model they espoused would bring about the rapid demise of traditional, installed software — but they seemed to overlook one vital point. What happened when an enterprise ended up with half-a-dozen applications, each operated by a different provider?" Give us your feedback in the ASPnews Discussion Forum It was an insidious enemy, because it became apparent only after an ASP started to become successful. Whereas the other factors were objections raised mainly by customers who weren't yet ready to adopt the ASP model, integration was a problem that came up after a customer had already committed to going the ASP route. The problem didn't afflict ASPs who hosted traditional enterprise software, since their mission in any case was to take charge of the customer's entire IT infrastructure. But this was not the case for ASPs whose business was based on providing a single, Web-delivered application such as salesforce automation, financials or expense management. Their avoidance of any involvement with legacy application architectures was the foundation of their hallmark capaability to offer rapid, low-cost implementation. Best of Breed Not Enough Web-native ASPs like Salesforce.com, NetLedger, OpenAir and others were supremely confident that the Web-native model they espoused would bring about the rapid demise of traditional, installed software — but their ambitious plans seemed to have overlooked one vital point. Even though Web-native application services were plainly cheaper and more convenient when compared to their individual offline equivalents, what happened when an enterprise ended up with half-a-dozen applications, each operated by a different provider? With no means of integration, all the benefits of adopting each individual application would be swallowed up by the cost and inconvenience of connecting processes and exchanging data between them. The absurdity became manifest with the example of San Francisco-based investment bank Putnam Lovell, which decided to bring in ASPs to provide the majority of its IT needs. Among the 20 or so different application providers it had accumulated by late last year, Putnam Lovell contracted Web services network provider Grand Central for the sole purpose of providing integration services among the others. Clearly, this was not sustainable. What was needed was a simple, standards-based system for exchanging data and managing workflow across multiple distributed applications — one that would be easy to implement and which wouldn't lock providers or their customers into constricted relationships. Yet this was hardly something that such a young industry had the resources to bring into being, let alone achieve widespread agreement and adoption. XML to the Rescue Amazingly, the standards these providers have so desperately needed have arrived this year, driven not by their own efforts but by the efforts of the very software industry they intend to supercede. The integration roadblock is melting away like a mound of snow in a spring thaw, dissolved by the rapid adoption of XML-based web services. The likes of Siebel, SAP, Microsoft and the others expect to preserve their dominance by opening up to standards-based integration with XML and Web services. But they're simultaneously opening the floodgates to an onrush of young contenders, by removing the single biggest obstacle that had previously held back their advance. Keenly aware of the market reach such capabilities will bring them, many of the most successful Web-native application providers have rushed to add XML and Web services connection capabilities to their offerings. (Among them, see Vocus Unveils API for PR Automation Suite, Intacct Unveils New XML APIs and Salesnet Releases Web Services API). Not Quite Clear Sailing Ahead A few more obstacles still litter the road ahead, including the lack of effective tools for metering and management of online services, and most notably the need for developers to fully embrace the loosely coupled design principles required for effective integration of on-demand Web services. But just as those early pioneers were among the first to recognize the true potential of online application delivery, so they may yet prove to be the greatest beneficiaries of Web services-based application integration. Do you have a comment or question about this article or the ASP industry in general? Speak out in the ASP Discussion Forum.