Vendors pave the way to ASP
NewsJuly 3, 2000
PC Week Australia
by Tom Allen
ZDNet, Monday July 03, 2000
Two vendors announced programs last week that are designed to cater for the anticipated demand for rented software applications.
While IBM was unveiling its Service Provider Ready program, Unisys Australia was making a grab for ASP infrastructure market share as it launched INFRAHOST, which it claims to be an Australian first.
First to announce that is, but its claim of being the first global outsourcing company to commit to being an application infrastructure provider (AIP) to software vendors who want to deliver software in an ASP forum underlines an emerging trend.
And IBM said it wants to "speed the transition of Australian-based Independent Software Vendors (ISVs) and solution developers to market as Application Service Providers (ASPs)".
According to Paul Gleeson, director of ASP Services at Unisys Australia, the INFRAHOST program involves service, hosting and enablement for ISVs wanting to enter the ASP marketplace.
"We are the ASP's ASP. We will meet their end-to-end infrastructure needs," he claimed. But he was a little shy of revealing any of the partnerships.
"We've got Infrahost negotiations going on with software vendors at present," he said.
One such company is Australian developer Infra Corporation, which markets help-desk and call centre as well as change management software and targets large enterprise customers.
Martin Curtis, business development manager for Infra observed that the company has seen its customer and prospect base move to a web-centric mode.
"We see the ASP model as attractive to SMEs, but there are enterprise customers that would like to eliminate some of their in-house infrastructure... I imagine there's a lot of politics though," he told PC Week.
"We see it [the ASP model espoused by Unisys] as having major potential, where currently it represents less than one percent. Curtis said that via such a model, it could deliver a support application to an organisation tomorrow, if required.
He added that the cost of a client server infrastructure over a WAN is sometimes prohibitive compared to Unisys' web architecture.
Stephanie Carullo, director of Commercial Business for IBM Australia and New Zealand, said the SP Ready program was released across the Tasman the previous week, and was designed for ISVs and ASPs to join at the most suitable stage, from education to launch. The stages are education, assessment, enablement, hosting and launch.
Carullo also acknowledged that it will initially appeal to SMEs, but claimed it will also attract enterprise customers.
"It's good for startups and small business, but the scalability will allow enterprise and multi-industry organisations to outsource non-core functions such as payroll," she said.
"The application providers that will succeed in the ASP market, will be those that can most quickly and flexibly adapt every part of their business to a new model," Carullo added.
Two of IBM's Australian pilot customers to have gone through the program are CRM and ERP software vendor Cincom and the emerging Australian ASP ApplicationStation.com, which has US parentage.
Cincom CEO Paul Hargreaves said that it was dipping its toe into the ASP water by working with IBM in New Zealand, and expects to launch its CRM offering through the program in the fourth quarter of the year, initially targeting small to medium businesses. "But it allows us access to enterprise customers," he added.
Application Station.com CEO Craig Hawkins, however, said that it was already partnering with four "household names in the enterprise [software] space".
One application is for accounts receivable that incorporates document imaging, an application that normally involves moving a lot of big files around the network, he said. But he claimed that the application, called Image Silo, delivered through the ASP model will save a lot of network traffic and storage.
According to Unisys' Gleeson, "We are removing the boundaries software vendors face in this market. Unlike the traditional ASP model, in which the ASP goes to market with just a handful of applications addressing particular sectors and disenfranchising the other software vendors with like products, Unisys is enabling all software vendors to become ASPs, removing the need for complex partnering agreements."
He said that, until now, software vendors have tried to provide ASP services to businesses by partnering with one of the smaller hosting firms, but he expressed reservations about the future of this model, as well as some of the companies advocating these services.
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