Santa Clara, Calif.-based Jamcracker has one answer to this problem. K.B. Chandrasekhar ("Chandra"), Jamcracker's founder, chairman of the board, and CEO, has been thinking about these issues since he left Exodus in 1999, shortly after its IPO.

"I decided to focus on the next paradigm shift, which was called ASPs in 1998, and is now called Software as a Service (SaaS)," says Chandra.

He identified five key components to the service delivery system he wished to build. Jamcracker needed to be able to:

1. Source applications
2. Provision customers and end users
3. Track and monitor the applications
4. Bill for the applications
5. Provide and enforce SLAs

The fully realized end product is called the Jamcracker Service Delivery Network (JSDN). The JSDN allows customers to have all services provided by the ISP (the centralized provision option) or from a "black box" inside the customer's network (the federated provision option).

"To an ISP today," says Brent Arslaner, Jamcracker vice president of marketing, "the JSDN is a public catalogue offering an array of IT services, business services, collaboration, and security, such as ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), anti-virus, and anti-spam. An ISP can pick and choose the services that make sense, and add their own in-house services to create a bundle for the market."

The JSDN builds on Jamcracker's earlier Pivot Path product [.pdf], which focused on delivery, authentication, and billing.

As the JSDN evolves, Jamcracker is focusing on vertical applications. Arslaner says, "We have vertical services for educational, health care, and financial services verticals, and that list continues to grow. Telecom and government are also important verticals. We came to realize we could only get so far with horizontal solutions.

Be Like a VAR, Sell to a VAR

The key is to deliver services in the customer's language, not the provider's language. "Everybody wants to remove friction in provision and consumption," says Chandra.

We mention Noss' talk at ISPCON. "That's right on the mark," replies Chandra. "We're there, after years of hard work."

We ask about lessons learned and mistakes made. "In 1999-2000," says Chandra, "we settled on the path of creating what we're doing today, but because of the state of technology at the time, we were forced to use a client-server architecture. The architecture raised the cost of integration, of launching new applications, and of help desk support. We were growing 25 percent per quarter for six quarters, but because we were using legacy infrastructure to deliver our new model, we were losing money."

Hard choices were made. "We had to downsize and rebuild. We re-launched back in 2004."

Know Thy Customer, Know Thyself

In application delivery, the enterprise buys from a trusted adviser, note both Arslaner and Chandra.

"We're signing new partners at a rate of five per week," says Chandra. "We're seeing many of these new VARs, people who understand the customer well."

"Whoever is the trusted adviser for the customer," says Arslaner, "we can help them get past all the technical and operational hurdles and enable them to offer a wealth of new services. If they tried to do this themselves, they would have to create relationships with each service vendor themselves."

Jamcracker understands that security is key component of trust, and Chandra's previous business, Exodus, was a top of the line host in part because of its Cyber Attack Tiger Team (CATT), which was the largest security team in the world at the time. Chandra says that open standards and security are both important.

Businesses need advisors, Chandra says. "We heard from one company with over 50 applications and no accountability."

"Sometimes, when the help desk gets their first call about an application, the help desk doesn't even know the application was purchased," adds Arslaner.

In an on-demand world, the relationship with the customer is vital, and the size of the service provider is not very important. "We can level the playing field," says Arslaner. "We can give service providers the catalog of operations, the secure management layer, the technology to enable their business customers."

Story adapted from ISP Planet.