SD Times Issue 111 by BZ Media
Author:BZ Media
Language: eng
Format: epub
Tags: SD Times;
Published: 2004-09-30T16:00:00+00:00
OPINION
Software Development Times . October 1, 2004 .
www.sdtimes.com
EDITORIAL
The ASP Strikes Back
Predictions of the demise of the ASP were premature. While many application service providers bit the dust during the dot-com implosion, the model remains viable—and is making a comeback.
There's nothing magic about an ASP. Despite the hype regarding their technology, and the inflated stock values assigned by Wall Street and investors, ASPs proved to be just as vulnerable as any other service provider: They could be brought low by poor management, inadequate funding, flawed product offerings, strong competition, skittish customers or even by lousy economic conditions.
Certainly, CEOs, CTOs and development managers have every reason to be wary, and it's their fiduciary responsibility to be cautious before engaging an ASP. Enterprises are vulnerable any time an outside service provider is part of the data path, or is intimately involved in its application stack.
Whether the company is actually hosting Web-based applications, like Salesforce.com, or is offering some key APIs via Web services, like Microsoft's MapPoint Location Server, the customer is at the mercy of that ASP.
The most obvious threat is failure. When a traditional software company fails, enterprise customers can continue to use its software indefinitely. Often customers plan for a migration to a more viable offering, but they can make that migration at their leisure.
But when an ASP fails, the situation is far more dangerous, and might be fatal for some enterprises. Not only does the ASP own its own software and program logic, but it may also maintain all the application data. Even if the enterprise is able to make local backups of its hosted data, those backups may not be useful, at least in the short term.
However, failure is not the only danger.
If an ASP changes its software—changes the user interface, changes the underlying code logic, changes the data sets, changes the terms and conditions for use, changes the APIs—the customer has no choice but to go along.
If you're using a traditional in-house application, you can test the upgrade, decide to make it (or not), and carefully stage the rollout. With a hosted model, you upgrade when the service provider flips the switch, whether you like it or not.
And if the service provider changes its fees when you negotiate the new contract, again, you have few choices. You can't easily change ASPs—and they know it.
That's not to say that ASPs are all bad. The cost model can be very attractive, especially for small businesses, or for those who would rather outsource as much as possible.
Many companies today have outsourced some part of their IT functions, whether it's Web hosting, e-mail virus protection, disaster recovery services or help-desk support. Outsourcing part of your software stack to an ASP is a reasonable option to consider, especially when it comes to expensive, hard-to-maintain applications like CRM or ERP
Just make sure that you consider all the risks, as well as the benefits. I
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