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To: freeus who wrote (7161)	11/15/1999 2:50:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 9068

The ASP paradigm is different, all right By Stan Gibson, PC Week November 7, 1999 9:00 PM PT URL: zdnet.com From quiet beginnings, ASPs have emerged as the fad of the year. Application service providers relieve IT departments of the burden of running applications by hosting them from a remote site for access by users with browsers over the Internet. Sometimes ASPs and outsourcers are mentioned in the same breath. But there are big differences?for starters, lawyers and contracts. And guarantees. Recently, officials from an ASP visited PC Week's editorial offices to explain their service and business strategy. The company shall remain nameless, although it's probably like many others in that it is venture-funded and has just been offering its hosted application for a few months. Its application is a travel-and-expenses package geared to the needs of small businesses, although the company has plans to expand its line considerably beyond that. I asked what kind of guarantees are offered in the case of lost data. Are there service-level agreements? Their response was that the servers and storage subsystems on which the applications ran were fully redundant. So why would you need a guarantee? Company officials want to give you a feeling of security about their data center, which they do not operate themselves but which is hosted by another party. In fact, ASPs are like middlemen or general contractors in that they bring the hosting service, application and user together. The company is betting you'll see that the cost of building a data center with the same level of redundancy would be prohibitive. That will demonstrate the logic of using hosted applications. Seems plausible, especially if you're a small company and need an application pronto. But it's not an argument that will carry much weight with big-data-center folks. They're used to carefully crafted outsourcing contracts that have been scanned closely by the corporate legal department. This is not to say you should never hand any of your applications over to ASPs?only that you'll have to get used to a different way of doing business in the new ASP paradigm. First, the pitch is often not geared for the big-data-center folks but for small busi nesses, where the cost savings of not having to buy servers and applications can make a big difference. And the applications are not mission-critical, either; take T&E, for instance. But if you can trim a few dollars off your T&E administrative bill by using an ASP, it's worth a shot. That is exactly what the ASP is counting on?that companies will start with T&E and then move up to bigger things. ASPs are to outsourcing what the PC was to data processing. Didn't many data-center bigots laugh at the PC when it was first introduced? It was highly susceptible to losing data. Still, this vulnerability was a trade-off people could live with?if the choice was computing and losing some data vs. computing too slowly or not computing at all. PCs were not tried in mission-critical applications at first, but only later, when their capabilities became well-understood. And PCs still lose data. ASPs and their infrastructure partners will probably establish an essentially sound, although not unblemished, track record for reliability. This will be enough to give the user community enough confidence to use them for applications of increasing importance. But in these early stages of the new ASP paradigm, just don't think of them as outsourcers.