Application Service Providers Market Research Articles

Best Practices Guidelines for Successfully Managing Application Service Providers (ASPs)

The purpose of this article is to identify various factors of success that can assist managers of Application Service Providers (ASPs) to develop and expand their firms’ businesses. These success factors are presented in the form of best practices guidelines, which have been developed from successful ASP experiences, and which are discussed in detail here. The discussion on successful ASPs, ranging across all ASP business models, focuses on meeting the customer requirements of ASPs—a major driver in the ASP market.

Towards the ASP E-Business Model: A Conceptual Framework for Mapping ASP Specific Value Propositions

ABSTRACT Today's emerging market is broadly characterised by rapid technological advances. This has consequently created an imbalance between perceived market demand for services and available technology. In the past few years, a lot of money has been invested in development and deployment of a new phenomenon called Application Service Provision (ASPn), and there has been a lot of paranoia surrounding the same. Despite the promise and potential of improving the way organisations develop, operate and maintain information technology application, Application Service Providers (ASPs) have fared poorly in terms of attracting a large client base. There is a general perception of a mismatch between consumer requirements for ASP services and actual vendor offerings. The aim of this study would be to combine both academic research and industrial investigation to propose some guidelines for resolving the current gap further examining the evolution of the ASP business model. This paper draws from a two-year research study (ongoing) on the market, business, managerial and technical challenges facing global firms, focusing specifically on traditional information systems outsourcing models and frameworks and application outsourcing, involving ASPs and web services.1 This will be achieved by investigating the current usage of the ASP market and the factors that affected the adoption and use of ASPs within horizontal and vertical business sectors. As mentioned earlier, there is an indication of a mismatch between customer expectations and vendor provisions in recent literature. Case studies would further help to understand if the vendors have taken into consideration the reasons for the models failure and evolved from their original state to be successful in the market and sustain the competitive advantage. To study the process of ASP business model evolution, a study of constructs has been undertaken.

How to choose an ASP: selection guidelines

The great promise of software‐as‐a‐service lies in its ability to deliver at a much lower cost and at much greater speed. In the future, software will be delivered in such a way that business customers can pick and choose entire applications or parts of them, paying on a per‐use or subscription basis. To fulfill this need, a new type of business enterprise has arisen, application service providers (ASPs). This paper identifies various success factors, or best practices selection guidelines, potential ASP customers/users should consider when choosing an ASP. These success factors were developed – using experiences of successful ASPs presented in groups based on their underlying business models – from customer requirements, a major driver in the ASP market.

Web-enabling applications for outsourced computing

The business of information has exploded since the birth of the Internet in the early 1960s. Advances in software and hardware engineering have transformed the role of the Internet from merely data and information delivery to the largest computing service delivery infrastructure in history. This transformation has created a gradual shift toward distributed computing and the application service provider (ASP) model for computing service delivery. The ASP market is largely driven by the increasing popularity of browser-based computing and the growing tendency for companies to outsource mission-critical functions. Advantages of the ASP model include reduced installation and support requirements, instant updates and synchronization, mass customization, and universal accessibility. Despite the obvious benefits, the ASP model has not yet gained momentum in power engineering, where most applications still conform to the traditional, standalone, three-tier architecture. The methodology featured in this article takes a traditional engineering application and Web-enables it for the ASP market. The article describes the architecture of traditional and enterprise applications and presents the technologies and issues involved in deploying a traditional engineering application over the Internet.

Outsourced CRM: Why it will increasingly rely on application service providers

Over the last two years, hosted software and the application service provider (ASP) model have been one of the hottest topics in IT. This paper looks at the evolution of the ASP and the implications for CRM. Certainly CRM vendors seem to believe that this concept offers potential, with most major companies having announced an ASP strategy. The key argument of this paper is that the ASP market is split into two very different models: the one-to-one and one-to-many ASP models. Although most analysts combine these models under the ASP umbrella, in practice they are poles apart, appeal to a different sizes of companies, provide different benefits and incur different risks. They also imply fundamentally different criteria for choice of ASP.

Application outsourcing: a new business model for enabling competitive electronic commerce

This paper gives an overview of the emerging application service provider (ASP) industry. The ASP model is a new form of application outsourcing (AO) which enables customers to access software applications over the internet. The market for branded application outsourcing services is expected to grow to $21 billion by 2001. The USA, UK and Germany will be the leading players. ASPs offer a new model of outsourcing by providing a contractual service which includes deploying, hosting, managing and renting access to an application via a centrally located facility. This paper introduces a research project currently being undertaken in Silicon Valley in the USA, and in Europe on evaluating application outsourcing using the ASP model. It explores some of the benefits and pitfalls of AO and suggests that three factors will drive the ASP market. They are: market forces including, mergers, acquisitions, joint ventures and strategic alliances; innovation and technical changes, including internet technologies; and business practices, such as core competence thinking and outsourcing practice.

Application Service Providers: Angebot, Nachfrage und langfristige Perspektiven

Web-based services (also called hosted services) are becoming increasingly popular. There is now a large number of software companies that market their products as application service providers (ASPs). This paper presents the results of an empirical study of the European ASP market. To analyze the supply side, we developed a catalog of criteria and used it to evaluate the service offerings and business models of more than 600 ASP companies. On the demand side, we surveyed a representative sample of companies traded on the German equivalent of Nasdaq. We asked questions about the companies' expectations and practical experiences with ASP-based services. The results confirm that ASP is definitely on the rise in Europe as well. However, several problems remain. Most potential customers are concerned about the confidential treatment of their data once it has been transferred to the ASP site. Quality of service and maintenance need to be agreed upon in advance, in contractual form. Finally, numerous potential customers have problems understanding the ASPs' offerings in sufficient detail. A more transparent marketing, coupled with a more personalized sales approach, should be a major concern for the ASP industry as a whole. The results of our study should be of interest both to ASP companies to help them improve their services and to IT management as a whole to help them decide which (if any) of their enterprise functions would gain from ASP-based services.

DELIVERING BUSINESS CRITICAL INFORMATION SYSTEMS THOUGH APPLICATION SERVICE PROVIDERS: THE NEED FOR A MARKET SEGMENTATION STRATEGY

This paper draws from the findings of a large-scale empirical research program on the global application service provider (ASP) industry funded by research grants from the European Commission (EC) and the Engineering and Physical Sciences Research Council (EPSRC). A conceptual framework consisting of a taxonomy of ASPs is used to demonstrate the different market segmentation strategies adopted by ASPs for competing in this fledgling and turbulent industry. Drawing from empirical research carried out in the US and Europe, the paper evaluates ASP strategies for deploying, hosting, managing and enabling software applications on behalf of their customers. The ASP business model is advocated as an attractive value proposition for SMEs, dot.com companies and other start-up firms seeking hyper-growth. Yet the evidence so far suggests a slow start to the ASP market as few reference sites demonstrating best practice exist. ASPs will therefore need to re-evaluate their strategies if they are to convince potential customers of the benefits of application outsourcing. Against this background, the paper evaluates the benefits and risks of the ASP model.

A future for ASPs?

Not too long ago, Application Service Providers (ASPs) promised to radically alter the way software is deployed at the enterprise level and indeed the way IT business is done. Many analysts forecast the ASP market to be at close to US$6 billion by end of 2001 and investors enthusiastically poured more than US$10 billion into ASP companies.