From products to solutions
The software provider says the problem is in the hardware. The hardware provider says the problem is with the network connection. The network-support company says the problem is the phone line. The phone company says the problem is the software. Does this scenario sound familiar? Too many outside services can clutter your business, but if just one of these services is missing, you can't d...
The software provider says the problem is in the hardware. The hardware provider says the problem is with the network connection. The network-support company says the problem is the phone line. The phone company says the problem is the software.
Does this scenario sound familiar? Too many outside services can clutter your business, but if just one of these services is missing, you can't do business. Whom do you call, and when?
Enter the ASPs
A new breed of service has emerged on the e-business horizon. Application service providers (ASPs) aim to provide total solutions, beyond a single product.
Types of ASP companies include software and hardware vendors, infrastructure providers, Internet service providers (ISPs), telecommunications companies, and system integrators. "Everybody wants to be labeled an ASP," says Adrian Gonzalez, senior analyst with ARC Advisory Group (Dedham, Mass.).
According to Mr. Gonzalez, ARC defines "ASP" as "a business entity that owns the hosted-customer relationship." The theory behind the ASP business model says a customer should only have to contact one support number for all problems related to its business process. Gone are the days of multiple vendors for multiple products and services—ASPs can provide the entire solution in a single, integrated package, with hardware, software, consultation, and support to back it up.
Many ASPs make their solutions easily accessible, as well. Using web application hosting (WAH), the ASP can provide customer access to software via a standard web browser or virtual private network (VPN), thus reducing the need for additional hardware or software on the customer's end.
Making the model work
Corio (San Carlos, Calif., www.corio.com ) is one such company to offer total industry solutions, which it calls the "Intelligent Enterprise." Each customer receives a custom package of software and services to most efficiently run the business. Corio hosts and maintains applications, servers, network technologies, and databases. The customer does not have to purchase any additional hardware or software to run the solution, nor hire IT professionals to support it.
Specifically for engineering and manufacturing, Corio offers solutions for process control and monitoring, cost management, production control, logistics, and quality management. Procurement solutions include RFQs, contracts, purchasing, and e-procurement services.
"Our customer adoption has been phenomenal," says Mitch Kristofferson, Corio's marketing director. "In 1998 and 1999, customers were hesitant to jump into an ASP service, [but now] almost every company is looking for an ASP model."
Mr. Kristofferson adds that the ASP market has grown by about 100% in the past year. Large corporations are beginning to see the benefits of ASP-hosted solutions, contributing to even greater potential growth in the future.
Laura Zurawski, web editor, email@example.com
Factors Driving ASP Growth
Lack of IT resources
Lower up-front costs
Lower support costs
Need to collaborate
Trend toward outsourcing
Source: Control Engineering with data from ARC Advisory Group