ASP Spotlight

ASPs: Saints or Sinners?

By Stuart Holden

THE JURY IS STILL out on application service providers. Doubts exist. Questions still hang in the air: "Are they secure?" "Are they expensive?" "Is it right for me?"

There are advocates and critics aplenty, but why are opinions so polarized?

An understanding of ASP development throws light on the issue. Similar to the dot.com boom, ASPs were hyped as the 'next big thing.' In fact, the rise and fall of the dot.com era is a good analogy to illustrate the issues that currently surround the concept of ASPs.

A problem common to both is that, in the beginning, people looked at them as investment vehicles. Everybody wanted to make a fast buck with a dot.com.

In the same way, hyperbole about the ASP market insisted that they were going to be worth millions. People jumped on the bandwagon and expected money to start falling from the sky.

But ASPs, like dot.coms, are not cash cows. They're vehicles for carrying out business. Furthermore, content is key and content doesn't happen quickly.

ASPs, eventually, will become a standard business model -- but it will take longer than originally expected. While it's generally accepted that businesses with an Internet-only interface are not the way forward, the Internet component of traditional bricks-and-mortar operations is here to stay. Intranets, Extranets and Web-enabled sales and procurement now must be integral parts of business.

The dot.com rush also normalized the idea of carrying business out over the Web. We now accept that 'virtual' is part of our reality. While it's clear that a lot of dot.com hype was essentially puffery about the emperor's new clothes, there has, nevertheless, been a shift. And so it will be with ASPs.

Why choose an ASP?

So why would you consider an ASP for your business? What would make it worthwhile?

Anyone who has purchased I.T. knows that it's not a simple matter of deciding to make a change out of the blue. Costs prevents spur-of-the-moment moves. It's not a matter of listing 10 criteria that determine your suitability for ASPs, rather, a 'requirement to change' needs to exist.

Could your firm benefit? To find out, first ask yourself the following questions:

1. Where is your technology in its life cycle?

Are you due for change in the next 12 to 24 months?

2. Does your I.T. in its current form restrict what you what to do?

If it doesn't restrict what you want to do, how many people do you need to maintain the system? If one person walked out, would that cause problems?

Would continuity be endangered? Is this a risk? (This might be an issue if you are undergoing risk assessment for insurance purposes and it's become apparent that your dependency upon a certain member (or members) of your I.T. department is too high.)

3. Do you want new applications, a new practice management system or case management system?

4. Have you lost your I.T. personnel recently?

5. Are the applications you require available on ASP?

If you answered 'yes' at any point, an ASP may be a viable alternative.

Size Matters?

What of the question, does an ASP suit a certain size of business?

The size of your company doesn't preclude using an ASP ­ you just face different issues.

Advantages of the ASP, commonly cited are: flexibility, control of costs, exposure to the latest applications, and a lack of significant investment required.

For small law firms, an ASP may be advantageous because you don't want to pay the salaries that the I.T. job market demands.

Small and medium-sized companies are more likely, in any case, to outsource elements of their I.T. because they don't have vast I.T. departments with expertise for specialized projects.

Another attraction of ASPs: extensive security, something many firms can't otherwise afford.

Large Firms

In comparison, law firms at the larger end of the spectrum face different issues. Project management of I.T. is on a far larger scale and they'd be more likely to involve "enterprise resource planning" software, such as SAP.

However there's no saying that this cannot be delivered by an ASP. They can either maintain their own infrastructure or it can be hosted elsewhere but in the end, the result is the same and the benefits are similar.

Culture, Not Size

Ultimately, it's not the size of the firm that matters. It's more the culture.

Do you want the flexibility ASP offers? How do you want to use your I.T. department? Would you rather have in-house I.T. personnel exploring how your I.T. can be exploited to your business advantage as opposed to them lugging terminals about and attaching wires?

Acceptance of ASP technology will require not only technological advances but a shift in business and company culture and a change in mindset: the lack of I.T. physicality ASP presents, is still a hurdle to be overcome.

After all, it does ask the user to take a leap of faith and effectively, to hand over the controls.

A lot of the hesitancy about ASPs is due to the fact that people are still too nervous to make that leap of faith.

The ASP is the future but this is still some way off yet and many questions and issues still exist that need to be solved.

These include the importance of gaining the support of software suppliers, overcoming the reluctance of in-house I.T. personnel who are being asked, effectively, to cannibalize their own jobs and perhaps, most of all, creating customer demand.

No new technology will get very far, if nobody wants it!

Stuart Holden is managing partner of Axxia Systems, based in Twyford, Berkshire U.K.