The ASPs are coming! The ASPs are coming! And no less a packaged software stalwart than Microsoft is cheering them on.
“The concept of having a ubiquity of services available to a company, much like cable and electrical services are today, will absolutely happen,” says Richard Belluzzo, group VP of Microsoft’s consumer group. “There’s debate on how to get there, but there’s no debate that it will happen. It will.”
Belluzzo was one of four speakers yesterday during BusinessWeek’s fifth annual Conference on the Digital Economy. Tasked with looking at how the growth of ASPs will transform the business community on a global scale, the “Technology on Tap” panel also included speakers from eCoverage, Citrix and Intira Corporation.
Bernie Schneider, president and CEO of Intira, agrees with Belluzzo. Schneider’s company is an ASP for what he calls the “stuff” beneath the surface of a business platform. Intira works with companies looking to outsource everything just below the application layer (servers, data center, etc.) so they can remain focused on their business.
The logic: No matter what a company is doing in an online space, much of the technology under the hood is similar across the board.
“You have to bifurcate the information technology piece,” says Schneider. “We can absolutely get that stuff on tap without a problem. But when we move into the realm of a business actually outsourcing its core application, which is integrally a part of a business, it’s going to take some time for people to be willing to do that. That could take decades.”
Difficulty also arises in the ASP space, says Belluzzo, because the basic management principle of focusing on core strengths, while logically sound, isn’t simple to execute due to the ever-changing marketplace. Consequently, picking an ASP to partner with is no easy task.
“There are things that aren’t critical today that will be tomorrow,” explains Belluzzo. “Even at Microsoft, we know we can’t do it all ourselves. You can’t argue with the core strength principle, but when you make choices to outsource those are often quite permanent because you lose internal expertise.”
Choosing, says Schneider, means ensuring an ASP can change as you do, but at the same time accepting that an ASP is not a cure-all to technical frustrations. Anybody who says they can guarantee 100% up time, he adds, is lying to you.
“I think the industry uses service levels agreements more as a marketing tool, which is sad,” says Schneider. “The only thing that really counts is whether an application is up and running or not. Ask your ASP what reports they will give you to measure how they are doing. If they can’t do that, they probably don’t know themselves.”
“Real-time reporting is also essential,” adds Scott Kauffman, CEO of online insurance site eCoverage. “You don’t want to have to try and hunt down a living person to find out what is going on when things go down.”
The first steps into using ASPs, however, need not necessary culminate into an outsourced ouch-source. Citrix Corporation, one of the founding members of the ASP Industry Consortium, works to turn a company’s own IT department into an ASP-like resource. President Mark Templeton says the company’s goal it to provide clients with “digital independence” while, at the same time, giving them technology on tap.
“We all know the corporate desktop is going towards being a digital workplace,” says Templeton. “We’re working to enable corporate customers to manage their IT resource like a utility. With this model you can measure who is using what within your company: service levels, storage, computing power in use, etc. We’ve seen many of our customers move from an allocated IT cost models to a service model like a cable provider.”
But as with cable, be careful not
to order too many “channels,” warns Belluzzo. He says Microsoft doesn’t measure an ASP’s quality simply by the amount of “up” time it ensures. As you fall back on the infrastructure and seek to solve a problem, a more pertinent question, he says, is whether you find a quick solution or just a lot of finger pointing.
“The whole chain is what’s critical,” he says. “If ASPs struggle it’s probably because the chain is too complicated.”