Application Service Providers (ASP)
There is a very interesting article over at thestreet.com by Jim Seymour. In his two part article on ASPs, Jim "thinks the market is going to emerge over the next couple of years as a big part of the corporate software business." You'll need a subscription to read the full article.
Wave is not mentioned, but Jim points out a few "potholes" along the way that I'll highlight below:
"...
Application Bloat. It's just not practical to deliver, time and again, whole apps to customers over the Net when those apps run many megabytes in size. No one has fast enough Net access for that. So software vendors still have to trim down their offerings substantially. We're still far from the kind of "thin client"-size apps which will work best under ASP.
Embassy can handle tens of thousands of transaction per second. No net connection needed. How fast is your corporate connection anyway? How about during lunch? How'd you like to run Excel and have to wait 3 minutes for it to launch?
Customer Price Resistance. In my experience, large companies see the cost savings from outsourcing via ASP pretty quickly, but midsize to small companies are much more resistant -- just as those companies often misapprehend other forms of outsourcing as an unneeded expense. And of course, consumers will go through the roof over this idea, seeing it as a gouge. Change is always a hard sell.
Agree, we have no control over pricing. Ultimately, the content will have to be priced to entice. But, we'll have more flexible payment models, by the hour or by the day. Customers won't have to commit to a monthly subscription.
Stasis. Apart from specific customer issues with ASP access to software, both the software vendors and the emerging ASP industry have to overcome that general and debilitating inertia which grips us all. If it works fine the way things are now, why change? Again: serious missionary work ahead.
Agreed to a point. Solving A above, which we do quite nicely, will help immensely in this area. I would disagree that things work fine now. Corporate software upgrades are a major pain in the rump
He also brings up some valid concerns about cutting out the middleman in the future, call it the "Microsoft Factor".
"...The problem is simple: The big software companies don't really need the new ASP outfits that they're cozying up to right now in an effort to get ASP off and running. No one seriously believes Microsoft, for example, couldn't bring up its own ASP network in short order. By doing so, it would cut out the ASP middlemen, draw closer to its customers -- and pocket a lot more of the revenue..."
---Slate |
