The mid - nineties saw a beeline to ERP Implementation with softwares such as SAP, Baan, Peoplesoft and other mid range ERP Systems. These softwares were not only costly to buy , but also required a huge sum to implement. Any way professionals associated with ERP implementation got immediate openings in US and other developed companies making the maintenance of ERP systems that much more difficult. These factors made the managements sit up and take notice and ask them selves. What long term benefits did the company reap because of the implementation? The ASP concept tries to solve the problem by making software and service more affordable.

It is clear that companies have to spend a lot of money to own the software. But what about Migration. Unlike a fixed asset such as Real Estate, software does not appreciate, infact software gets clobbered over the years with new versions and patchy upgrades. Finally companies decide to Migrate the system to a newer system. Such trends have seen some software companies specailise in development of Migration software Services. Datamatics Ltd. is one such company which has got an entire business unit dedicated to Software Migration Services.

The application service provider is a unique concept in selling applications. Once a company outsources software through an ASP, the company need not worry about upgrades, variations etc.. All it has to do is to keep evaluating other ASP options.

The ASP consortium was set up in May 99 (aspindustry.org) and has now risen to over 400. It includes giants such as IBM, AT&T, Cisco, Sun etc.. The ASP consortium defines ASP as - An application Service Provider manages and delivers application capabilities to multiple entities from data centers across a wide area network. So the essence of the ASP model lies in the usage and not on the ownership of applications. With the ASP implementation, the end user concentrates on getting his job done and does not worry about how to mange the IT infrastructure. The coming together of software development and Services and the hardware setup towards an Internet Centric environment has enabled the ASP segment to emerge. What it basically means is that software developed for an organization would not just be maintained by external vendors but also be physically hosted outside the organization.

In other words, ASP is essentially, a supplier who makes applications available on a subscription basis. An ASP is a business partner that provides choices regarding how software applications are managed and delivered.

Now that it is clear that ASP is the convergence of different technolgies, let us understand the opportunities and threats for various industry segments.

Software companies are really perplexed with the ASP model. It is for them a case where if they embrace ASPs totally will result in loss of revenue for them. Any way if the ASP concept goes ahead, in the long term the revenues will increase as the volume increases.

The hardware industry will have a shakeout. Hardware platforms will be crucial to an ASP's ability to leverage a one to many delivery model. Hence hardware companies need to partner with companies that have the ability to put together total solutions.

The ASP model is a shot in the arm for network companies. This is because the very logic of an ASP solution is to decrease costs of systems, software and support staff by using high speed network connections.

Payroll

Ecommerce

Supply Chain Management

Accounting

Human Resources

Collaboration or Messaging

ERP

Customer Relationship Management

Games and Video Management

aspisland.com

aspnews.com

citrix.com

smartonline.com

The author is Director, Fands Infotrainers and can be reached at sandeep@fandsindia.com