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By Phil Wainewright August 29, 2001 Could the next resurgence of the ASP sector occur in Europe rather than North America? After the U.S. economic downturn took hold last year, Cisco Systems executives within its hosted applications program came to the conclusion that the next wave might well come from across the Atlantic. Fred Danielsen, a key architect of the Cisco Hosted Applications Initiative (CHAI), relocated from Silicon Valley to Europe early this year to help spearhead market development efforts.
All About the Infrastructure This is in contrast to the U.S. environment, where federal regulators enforce a split between the backbone carriers and the providers of the "last mile" services that connect subscribers to the network. This makes it difficult for operators to build their service offerings, he said. "Over the last mile, [U.S. operators] have all kinds of challenges in terms of regulators. If you don't have a clear understanding of what you can do on the last mile, it becomes very difficult to build the framework," he explained. "Look at what happened to the DSL companies. They're almost all gone."
A World without Wires "At the end of this year, there's going to be a lot of software vendors being pressed to deliver their software over wireless — which is not being recognized by U.S. companies at all," he said. Cisco itself has taken the plunge as a user of wireless applications, implementing delivery of Oracle, Peoplesoft and in-house applications to its field sales teams using iPaqs connected via the Vodafone cellular network. The aim is to create a proof of concept for wireless delivery of business apps, said Danielsen.
Keys to Taking Europe One factor has been that smaller businesses in Europe have a tendency to wait for a lead from those in authority, he said. That lead has yet to come, since their trusted advisors, such as professional bodies and industry associations, have not been ready to recommend hosted solutions, while government officials and ministers have also held back. They perhaps in turn are waiting for larger companies to make the first move. Cisco recently surveyed the views of CIOs in larger European companies, and identified four areas where they had reservations about dealing with ASPs:
Back to the Infrastructure "As the market moved forward, it became evident we needed to look at the entire delivery infrastructure, which included the backbone and the last mile. That end-to-end infrastructure should support many types of services," Danielsen said. "Basically it's a blueprint of the three pieces — data center, backbone, last mile," he said, one which meets the service delivery requirements of hosted applications in a cost-effective way. Cisco's role is to get different providers working together. That means, for example, teaming up virtual private networks (VPN) backbone operators with colocation providers (colos) and wireless carriers, to create integrated end-to-end application delivery infrastructure. Brokering such partnerships is in line with consolidation trends within the industry, said Danielsen. "You're going to see the next generation of traditional colos moving into a more managed service end-to-end — and one of the options will be wireless," said Danielsen. "We're seeing a lot of consolidation," he added. "By the end of the year, you're going to see PTTs, telcos and service providers merging with colocation providers," he said. Most of its current partners, such as British Telecom division BT Ignite, telecoms and hosting provider Energis and Danish managed network provider DMdata, are network or colocation providers. Cisco also expects to work closely with IBM Global Services. One of its first allies on the software side of the business is Web services platform startup Genient. Many software vendors have not yet adapted their products to the requirements of the network-hosted environment, said Danielsen. "I don't think software vendors are going to be successful unless they can deliver software that is customized and packaged at the same time," he said. In other words, applications will have to be easy to configure to the needs of individual businesses and users at the point of delivery.
Mission to Europe |