I’ve been hearing a lot about ASPs. What exactly are they? ASPs represent a different way to manage information systems. In the past, companies generally owned and maintained the software for their computer applications. Now, however, applications can be delivered and maintained remotely over the Internet. Just as your company buys electricity from centralized utilities, it can now purchase computer applications, on an as-needed basis, from centralized application service providers, or ASPs. You don’t have to own your own software any more than you have to own your own power generators. Simple examples of ASPs can be found all over the Web. Many consumers, for instance, use Web-based e-mail services. Rather than purchase e-mail software and install it on their hard drives, they collect and send messages through Web sites maintained by ASPs like Hotmail or Onebox. In the business realm, a wide variety of applications, from word processing to accounting to e-commerce, are now available through ASPs. Even developers of highly complex enterprise resource planning (ERP) systems have announced plans to provide their applications on a subscription basis over the Internet. What are the benefits of ASPs? Lower costs and less complexity. If yours is like most companies today, you probably employ a lot of people and spend a lot of money to upgrade and repair your various applications. You might be able to reduce your IT investment substantially by subscribing to applications maintained by third parties. For a single fee, ASPs provide not only the software but also related services such as technical support, virus protection, and data security, and they can upgrade the software without having to fiddle with your company’s servers and personal computers. Moreover, signing a contract with an ASP involves considerably less risk than installing a vast computer system. If you don’t like the service you’re receiving, or if your data-processing needs change, you can shift to a different ASP. So can I get rid of my in-house IT department? Not so fast. While the rise of ASPs seems likely to alter the role, size, and shape of IT staffs, companies will almost certainly need to continue to maintain certain systems in-house. Some of your data, for instance, may be too valuable to be entrusted to a third party. Or you may have developed unique software that gives you a clear advantage in the marketplace. The last thing you’ll want to do then is shift to a generic system that competitors can also use. And in any case, ASPs are still in their infancy. A lot of bugs need to be worked out. The best strategy now is to begin to learn about and sample the services of ASPs, while developing a longer-term strategy for capitalizing on their capabilities and safeguarding your own competitive advantages.
