www.aspnews.com/trends/article.php/978151
By Allen Bernard February 20, 2002 Even though the enterprise market has been slow to adopt ASP services en masse, most corporate IT professionals have realized the value and efficiency of the model. And we aren't talking about admiring the concept from a distance — many technology pros are beginning to rearchitect their in-house systems to resemble ASPs.
"Where we are in the adoption lifecycle is we have entered the pragmatic stage," Reza Ghorieshi, IBM's global technical strategist, eBusiness, told ASPnews. Ghorieshi also heads up the Best Practices committee at the ASP Industry Consortium. "You've had your early adopters, and we've gone through one iteration of people trying things. We've had some success and failures. IT folks who were sitting on the fence before are now comfortable enough with the idea and see the cost savings and benefits." Another reason for the emulation is the realization by corporate executives that they can sell in-house developed software solutions as a niche ASP and possibly turn a profit from their IT department, said Ghorieshi. "They see it as a way to turn their IT center, which almost always a cost center, into a profit center or if nothing else a break even center," he said. "The key is, who owns the applications. If corporate IT owns assets that are valuable in the marketplace, then they will become their own ASP and provide that service to the marketplace."
The Transformation to ASP New Moon, for example, has seen interest in its Windows Terminal Server infrastructure solution, Canaveral, take off since rearchitecting the company last year to focus on corporate customers instead of service providers. Since the general launch of Canaveral in September 2001, the company has signed pilot deals with GMAC Mortgage Corp. According to New Moon, GMAC is planning to resell in-house software wrapped in an enablement package powered by Canaveral. New Moon is also in talks with major international banks in U.S. and Europe. In fact, the company had no plans to enter the European market until they were contacted by European banks looking for an alternative to Citrix's Metaframe solution, Marc Lowe, New Moon's president and CEO, told ASPnews. "Corporations are starting to say if we did this everywhere ... we could save money across the company," he said. "And that is a fairly new movement. There have always been a few companies that did it, but more and more are jumping on that bandwagon now." Over the last four months, the company has tracked 800 downloads of its full-featured evaluation product from its Web site and signed a deal with Unique Cooperative Solutions Inc., the distribution company that helped put Citrix on the map. USCI moves software through a network of 4,000 VARs and believes it will sell at least 50 copies of Canaveral in the next month or so. "We've had a number of companies that look on the Internet for an alternative to Citrix and they find us and start buying from us," said Lowe. On top of these successes, New Moon is also working with German system integration firm BOV as well as Accenture and EDS here in the U.S.
New Twist on Old Concept What's changed is that instead of hardwiring a partner into the corporate WAN or providing a dedicated link to an off-site employee, companies are looking at hosting as the way to connect with employees, vendors, suppliers, distributors and customers. "The information has to be shared across the enterprise," he said, "whether it's net-native or a traditional application like Microsoft Office, nobody really cares; they just want the information. So, that's our mission at Citrix, to make information access as easy as a phone call."
Everything is Measurable Prior to the development of ASP as an industry, many companies where held virtual hostage by their IT departments, Amy Levy, an ASP industry analyst with Summit Strategies, told ASPnews. With the rise of ASP, suddenly there was a competitor that could effectively take over the role of in house IT. This led to increased performance expectations from corporate executives scrutinizing the true value of their IT departments. The rise of ASP also gave rise to measurable service level agreements (SLAs), or, explained another way, ASP gave rise to the idea of measurable IT performance metrics. Realizing this, some companies have decided to make the SLA concept work in house by ASP-enabling their own IT departments. By doing so, they can now see exactly who is doing what with what software packages how often and for how long. With this information in hand, they can then put a price tag on the value IT provides their operations. "Five years ago, corporate IT departments, to an extent, ruled the roost and almost held the rest of the organization hostage," she said. "There's an outside bar now that these internal departments need to meet and they really need to start passing muster because there is outside competition." The advent of today's crop of portable, "connected" devices like PDAs, laptop PCs, and cell phones with wireless Internet links, also adds complexity to the mix, making the whole job of IT that much more challenging, said Citrix's Whitehead. "Now its much difficult because of the rapid change of applications," he said. "The [desktop] PCs don't necessarily keep up with the applications and IT departments are asked to do more with less and the types of devices that are out there are enormous, PCs, PDAs, Linux devices — all these things that corporate IT departments go nuts with — and users still want to access their applications." Although she sees a more diverse future for corporate IT, by shifting to an ASP model and supplying each desktop PC with its functionality through a portal, for example, corporate IT can at least unburden itself from much of the maintenance work of keeping a large organization's networks up and running, said Summit's Levy. "It can really be a blend," she said. "We see it as evolution, as a continuum of opportunities along this sourcing/hosting line. I could see a large company saying 'OK, for my Web site I'm going to work with Digex and it's going to be a managed hosting arrangement. Then, as far as financials, we are going to manage those in house ... messaging, that's going to be completely outsourced to a different firm.'" So while not every enterprise will subscribe to ASP services, the principles of the model are working their way into corporate IT departments one way or another. In fact, don't be surprised to hear an IT manager you know say, "Use an ASP? We are an ASP." Do you have a comment or question about this article or the ASP industry in general? Speak out in the ASP Discussion Forum. |