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Theme: Outsourcing E-Commerce is Becoming Popular
ECMgt.com brought to you by ECnow.com ECnow.com 1999 trend #03: "Movement of e-commerce to a service industry" and "outsourcing of e-commerce functions will become very popular." FEATURE ARTICLE E-Commerce
Outsourcing: What to Consider when "Renting" a Web Application If you're gasping at the term "ASP," you’re not alone. There are as many definitions as there are experts who tout it and vendors who sell it. To some it's the godsend of information technology. To others it's the snake in the IT garden. Either way, it raises many questions: So, what is it? What types of services do ASPs provide? What is available for e-commerce now? What to ask when evaluating a provider? What is an ASP? Two primary experts on Application Service Providers (ASPs) give the following definitions:
In my terms, an ASP is a third-party that provides use of a software application that is located, managed and maintained at the third-party's site, is accessible by multiple clients via the Internet or other wide-area network, and is charged for on a per-use, monthly or yearly basis. One reason this segment is hard to define is that experts differ on the state of the ASP market. Wainewright has identified numerous subsets of the market, whereas Terdiman says, "the state of the market is in flux." For most of us, the ASP phenomenon is new and as e-commerce managers we're curious to know what to do about it. What Are the Types of ASP Services? There are three basic business models for ASPs: (1) outsourcing, (2) hosting and (3) the application portal, which jargon aficionados call "netsourcing" or "websourcing." All are versions of outsourcing, although there are fine lines of differentiation. ASP outsourcing -- differs from traditional outsourcing provided by the External Service Provider (ESP) mainly in the form of payment. The traditional ESP handles the function for the client and charges a pre-defined service fee regardless of the amount of use or activity, whereas the ASP charges on a pay-as-you-go or pay-per-use rental basis. ASP hosting -- is a form of advanced hosting in which a web site handles transactions interactively over the Internet and integrates with the client company’s existing business applications, which may be in-house at the client site or hosted elsewhere. ASP hosts need to do much more than just run a system for a client – they need to have the application, integration and support to function as an external IT shop for the hosted application(s). Typically only high-end hosting providers can afford the resources to offer true integrated hosting. Application Portal – is a web destination site that aggregates applications and provides access to them typically via a browser and usually for a fee -- or free, depending on its advertising revenue and partnership agreements. What e-Commerce ASP Applications Are Available Now? One fact is sure: there are not as many pay-per-use e-commerce applications available to businesses as there are applications provided by ESPs with traditional business models and payment terms. The initial ASP offerings are targeted primarily to small and medium-sized businesses and have great appeal to start-ups. In addition to the services mentioned in the publisher's article in this issue, according to ASPnews and recent press releases, key e-commerce ASPs include those listed below:
What to Ask before You "Rent" As the charts in this issue of ECMgt indicate, currently there are more new companies in this market than established vendors. New or not, in either case there are key questions to ask that pertain to any Internet service provider, and some special considerations for this new way of using applications. The following is a checklist to use in evaluating a prospective ASP service. To Rent or Not to Rent… Checklist of Questions for Evaluating ASPs Questions for the Provider:
Questions to Ask Internally
The Bottom Line on ASPs It is too early to tell which vendors will be the dominant players over time -- the new ASPs, established application software vendors, system integrators or ESPs. Perhaps the time is right for a new ASP service, such as a web-based customer relationship management service that integrates across a company's diverse rental and in-house applications and presents a unified interface with the customer. One trend is clear: what we’re seeing now is proof that the web is indeed becoming a service medium. ### Please forward ECnow.com's ECMgt.com to friends and colleagues who will find it valuable. For copyright purposes we must ask that ECMgt.com only be distributed in its complete form. View past issues and signup to receive it at this location: http://ECMgt.com/ or mailto:VMS3.Subscribe@ecnow.com?subject=ecmgt.v1.08+subscribe Copyright
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