Should you be bitten by the ASPs?

Application service providers promise a fast and more reliable solution to applications operations. This tool helps you determine if their services are right for you.

Picture this. The key techs running the new e-commerce section of your Web site leave for a gazillion dollars worth of stock options from a dot-com. Then the CFO insists on having a variety of new productivity metrics developed from data sitting in the enterprise resource planning (ERP) system, a task that no one on staff knows how to do. To top off a tough day in the data center, the I/O monitoring tools indicate a gradually increasing flow of message traffic from internal users that is beginning to slow your servers. And no one knows what to do first to avoid a meltdown.

Depending on the size and type of your company, what you need done and other factors, it may be time to find an application service provider (ASP). ASPs provide applications hosting and maintenance for a fee. These organizations' services are somewhat related to the old-time sharing, service bureau approach to data processing from 20 years ago, but they're adapted to take advantage of the Internet and the World Wide Web. Instead of your organization running its own servers, applications and other hardware and software, an ASP provides offsite server and storage farms and a virtual private network (VPN) connection over the Internet. Instead of outsourcing your data center, you outsource the application.

Your users just need a browser, a PC and some security software to access the applications and data files remotely. And if you select the appropriate application and ASP, the only downside is you have to pay for the access on a per-user or per-month or per-transaction basis. Evidence to date suggests that certain applications, such as electronic commerce and Web transactions, are among the most appropriate tasks to outsource to an ASP. This tool can help you decide if the ASP approach makes sense for your organization.

Forrester Research Inc., a market research and consulting firm in Cambridge, Mass., estimates that the ASP market will grow to more than $11.3 billion in revenues by 2003, up from nearly nothing a few years ago. The soaring increase in revenues is in part due to a booming economy and the resulting short supply of technologists, as well as to the strong interest in rapidly joining the ranks of e-businesses. When e-commerce programmers are considered demigods, sometimes it is easier to rent their expertise from an ASP than to try to hire and retain them as employees.

Is it time for your organization to consider an ASP? This interactive management tool (calculator) will help you determine whether the ASP approach to systems development and maintenance is right for your organization.

The Enterprise developed this Rule of Thumb decision tree and estimating tool about ASPs based on information provided by a number of analysts, vendors and users. Stacie McCullough, Brendan Hannigan, Liz Leyne and Andrew Reinhard of Forrester Research provided especially important expertise; we are grateful for their support. Forrester is a leading research and consulting firm that addresses a broad range of technologies. For more information, go to its Web site: www.forrester.com.
Visit CIO magazine's online ASP resource center for a list of other useful articles and links.