Preface
The explosion of interest in the Internet and electronic business is creating a myriad of new business opportunities. Every day, more and more businesses seek new solutions involving the Internet and Web-based technologies. These businesses realize that the new technologies can enable them to more effectively transact business with customers, suppliers, and internal departments, and more efficiently run their operations by leveraging the capabilities offered by the nascent Internet technologies. While many ISVs and solution providers still believe that their customers would purchase hardware, COTS, and tools and then customize/develop them for their use, increasing technological complexities and overhead make these propositions ever more taxing or simply economically impossible for all but a few very large companies.
>Why a Book Analyzing ASP?
Recently, a group of IT market players pioneered the concept of application outsourcing. The key premise for application outsourcing is that a business application doesn't have to be owned, run, and maintained by businesses themselves but can be provided by an outside party. Like many services bought and consumed by businesses, IT services can also eventually be bought and consumed. Some promising results have already been achieved in application outsourcing with some application outsourcing models.
This book attempts to define application outsourcing, understand its
genesis, and develop rationale for its future growth and evolution.
Application outsourcing enables businesses to economize on facilities, software, hardware, and staff by either fully or partially eliminating their IT functions. It is especially advantageous to medium and small companies for whom application outsourcing can provide access to application functionality that up until now has been unavailable or simply not affordable.
The outside parties that offer application outsourcing services-that is, application outsourcers, or application service providers-can achieve major operational efficiencies and higher quality of services by leveraging built-in ASP economies of scale, scope, and learning inherent in a shared outsourcing model. For example, economies of scale can arise from the sharing of networks, servers, systems, and application software or from shared customer care, data centers, support, and maintenance. Economies of scope can result from standardization, version control, reuse, and focused training. Over time,
as ASPs learn how to do their business, new efficiencies attributable to the economies of learning (as in a learning curve) will accrue and make ASP even more efficient.
This book attempts to formalize diverse economies inherent in ASP and apply them to ASP-related decision processes, models, and architectures.
Application outsourcing (or ASP) is more than just a collection of multiple IT departments. Service improvements cannot come from simply duplicating and multiplying traditional systems and operations. ASP must leverage the scale and scope of its systems and networks, and it must thrive on synergies of experience and refined policies and processes to offer services that are superior to those an individual IT department could ever provide. To achieve this, there must be something special about ASP, the technologies it uses, how it designs its architectures, the skills of people running it, and its operating policies and processes.
This book attempts to define ASP architectures, applicable technologies, and specific ASP services to be offered to ASP business customers.
ASP is a new phenomenon. If the logic of ASP services becoming commodities and utilities described in this book should prevail in real life, current ASPs will, over time, undergo major metamorphoses.
This book attempts to peek into the future, so to speak, by projecting some
of the currently observable and sustainable trends to paint a believable and probable view of tomorrow's ASPs.
What's in the Book
This book is an analytical assessment of the phenomena of ASP. The hallmark of its approach is the introduction of various analytical frameworks applied to ASP. Frameworks are used throughout the book to categorize, classify, or simply organize an understanding of what ASPs are and where they are going.
Thus, the book introduces frameworks for customer ASP economics, ASP services definitions, ASP technologies, ASP architectures, ASP ecosystems, ASP value propositions, ASP investment decision processes, and some others.
The book is written in a businesslike language focusing on the business impact of ASP on its customers, ecosystem, and overall economy. Words like value propositions, cost/benefits, time-to-market, capital preservation, capital and expenses, service quality, and other business-related terms are used extensively.
This book is a modest attempt to understand ASP. It leaves a lot of questions open to further analysis and discussion. It hopes to explore and analyze, posit and argue, provoke and challenge. While the book may contain some contestable statements, either explicit or not, they are intended to incite debate, not controversy.
What Is Not in This Book
This book is not about ASP markets and their trends, even though some references to market research are provided. This book is not about rating and comparing already available ASP services, their pricing, delivery channels, and support, although some elements of ASP's marketing mix are mentioned to define ASP's competitive advantages. The book alludes to ASP's drivers and enablers but doesn't study them in depth. This book is not about competition and selection of best of breed services and providers.
No book on technology or business can ever provide a complete account of its subject. Some things are always left out. Some other things, however, may be excluded from the book, or disclaimed, by design. Here are some of them: Products and Vendors. While the book mentions certain products and vendors, such references are not endorsements. Technologies, products, and business requirements change rapidly and endorsements become time-dependent judgments inappropriate for a book. Products and vendors are mentioned in the book mostly to illustrate the state of technologies for the time when the book was written or, perhaps, to illustrate or support a certain point made in the text.
Market Research and Statistics. As was indicated above, this book doesn't focus on marketing. Still, some market research, published articles, and government statistics are provided and referenced in the book. Normally, such references are used to substantiate the author's logic and conclusions and should only be trusted for the time and space for when they are applied.
Recipes and Frameworks. The book avoids all kinds of technical and business recipes. It does, however, emphasize the frameworks. While some frameworks may have a cross-business applicability, there are no one-size-fits-all frameworks. It is up to the reader to decide how to apply each to their case and then fill in the blanks accordingly. Note that no framework is ever final and complete, and that other, better frameworks will inevitably arrive. Still, if readers should find some frameworks in this
book helpful, the author will consider this book a success.
A Word on Terminology
Vision, business needs, and new technologies drive the creation of a new marketplace. Uncertainty, doubt, and limited knowledge rule its early stages. And it doesn't help when the players in the marketplace also add to the confusion by creating too many definitions and nomenclatures. Yet, this is exactly what is happening in the ASP marketplace.
As of this writing, more than 2,000 providers offer ASP types of services. There are ASPs, Business Service Providers (BSPs), Network Information Service Providers (NISPs), Solutions Service Providers (SSPs), Commerce Service Providers (CSPs), Business Process Outsourcers (BPOs), ASP Aggregators, and others, just to name a few. Add to them Internet Service Providers (ISPs), Independent Software Vendors (ISVs), Value-Added Resellers (VARs), Systems Integrators (SIs), Vendor Integrators (VIs), Managed Services Providers (MSPs), and Network & Systems Management (NSMs) Outsourcers and others-many of them also dreaming to be providers-and figuring out who's who gets very depressing, very fast. So, to simplify terminology, the previous definition is limited to the providers of network-delivered applications services only. Thus, the three major terms used in the book are Service Providers (SPs), ASPs and Application Outsourcers. SPs are more generic than ASPs as they provide services supporting ASP. The terms ASP and Application Outsourcers are used interchangeably.
Additionally, it is assumed that the ASP (or an SP or an Application Outsourcer) is built as a network-computing (NC) environment. Therefore, the term NC is also used extensively throughout the book.
Audience and Technical Level Required
All participants in the ASP business model are the book's targeted audience:
- ASP Entrepreneurs investigating ASP markets and business opportunities
- ISVs seeking new markets for their products
- Service Providers looking for new use of bandwidth and portal services to retain customers
- Technology Providers adjusting to new market demands and looking for new markets
- Systems Integrators (SIs and VIs) seeking new/replacement revenue sources
- VARs seeking new/replacement revenue
- Investors seeking new markets and companies to invest in
Most executives, managers, and business/technical analysts of potential ASP customers can also benefit from this book as it can tell them, among others things, how to choose an ASP.
While this book is not intended for purely technical professionals, some things about the readers are assumed. They include:
- Some understanding of computing and communications technologies and terminology, especially the Internet
- Basic knowledge of the most significant technological and business developments in the computing and communications industries over the last five to ten years
- A familiarity with the names of certain trend-setting companies and their products
Organization of This Book
The book consists of two informal parts and the last summary chapter. Part 1 covers the ASP basics and consists of three chapters.
- Chapter 1 offers simple definitions of ASP.
- Chapter 2 explores why businesses outsource and how an evolution of business needs forced traditional outsourcing to become ASP.
- Chapter 3 provides a deeper analysis of the ASP phenomenon-its salient business and technical characteristics, its ecosystem, and its drivers and enablers.
Part 2 of the book consists of seven chapters. It combines the architectural, technological, and business aspects of ASP.
- It first defines the economic framework (Chapter 4) for the analysis of distributed network computing architectures, which, at the end of Part 2, in Chapter 9, is applied to ASP to derive its competitive strategies.
- In the meantime, the intermediate Chapters 5 through 8 are dedicated to defining network computing and ASP architectures (Chapter 5), the requirements for ASP types and services (Chapter 6), ASP management disciplines (Chapter 7), and ASP security requirements (Chapter 8).
- The last chapter in Part 2, Chapter 10, is dedicated to ASP enabling technologies that both support the ASP technical, management, and security requirements and provide the foundation on which future ASPs will be built.
The last chapter in the book, Chapter 11, provides insights into ASP's future.
