With the number of acronyms clogging up the ASP market, it can make it difficult to decide exactly what services meet your outsourcing needs. Take a look at the options available in this comprehensive guide to ASPs.

ASP security primer

If security isn't among your top criteria for evaluating potential ASPs, write it in now. Paul Marriott, 9i business development manager at software vendor Oracle, believes security is right up there in terms of importance. "There's still a lot of concerns around about organisations giving data to a hosted service provider in case the information won't be secure," he says. "Customers need to make sure any provider they seek services from can provide an adequate level of security."

And because ASPs know effective security is essential to their business, they spend more on it than most companies could possibly afford.

ASP customers need to feel confident that their data is safe not only over the networks but also from the prying eyes of ASP employees. Information theft is a huge risk for companies. If an ASP employee stole financial data that outlined a business's new project, for instance, and sold it to the company's competitor, the results could be disastrous. While no one can predict employee information theft, ASPs must earn a customer's trust to be successful.

Before you evaluate an ASP's security model, take steps to understand what you are protecting. Develop a risk assessment plan: think about who might want to steal your data. Also analyse critical spots in your information exchange network--and network configurations--including hardware (servers, firewalls) and software (passwords, authentication). Ask how the provider can implement a security solution that will protect every shred of your data and every access point to it.

But don't be too concerned about viruses and denial-of-service attacks. Almost every ASP has a similar network infrastructure to handle these. What separates the top ASPs, according to security experts, is their contingency plans. What if your ASP is compromised and data is lost? How will your ASP recover the data? Does it have redundant backup servers? Are the servers located in one location or in different cities? Will you be alerted if something goes wrong?

Most ASPs have undergone third-party enterprise-level security audits; when you're evaluating an ASP, ask to see its report card. Some ASPs will also let you tour their data centres, but be prepared to undergo a background check (which is a good thing). Before signing on with an ASP, make sure the company is willing to sign an NDA regarding your business model and information, and ask about its security guarantee. This should call for harsh financial penalties if your data is lost, hacked, or stolen. Microsoft Australia's Meyer also highlights the importance of checking an ASP's third-party certification. And he offers a reminder about one of the biggest holes in security systems is that they don't get implemented: they need to be turned on.

Finally, an ASP's security is only as good as the habits of your employees. Your employees need to be trained to practice good security habits: remind them not to give out passwords or talk about more sophisticated info, like your network infrastructure. What is common sense to you may be new to your employees, and security is often forgotten in practice.

--Vivienne Fisher & JP Vellotti

Contents

1.   Intro      2.   Network & Telco ASPs      3.   Collaboration ASPs      4.   Packaged applications ASPs      5.   MIS ASPs      6.   Data Management ASPs      7.   Looking forward

Network & Telecommunications

Access to your network is out of sight; with an NSP or MSP, it can also be out of mind. There are two ASP-like approaches that businesses can choose from to run corporate networks. One is a network service provider (NSP), which manages a company's network remotely. This includes overseeing access points between off-site users as well as the company's internal network. An NSP might, for example, manage a firm's virtual private network (VPN) used by field salespeople to dial into the company's network from the road.

Unlike an NSP, which manages only connectivity, a managed service provider (MSP) looks after every aspect of a company's network infrastructure, from hardware to software to support and development. MSPs charge clients for software installations, development fees, and network design and maintenance; NSPs charge for bandwidth, and client companies pay for usage and uptime.

Companies with few IT resources may want to consider an MSP. MSPs are able to integrate different kinds of pre-packaged software in a single interface over a secure connection. This lets the MSP measure performance, security faults, and assets across three keys areas of infrastructure--networks, systems, and applications--all from a single computer screen, for quick and easy function reporting and troubleshooting.

For companies interested in getting optimum connectivity, especially among remote users, an NSP is another option. NSPs allow clients to access an enterprise-level network infrastructure without laying out the cash to create it in-house. Access to a network of this size means near-constant connectivity at high speeds. Additionally, 24-hour network support may make the NSP model a good value proposition for some businesses. When selecting an NSP, companies should remember they are negotiating for service rather than tangible goods like hardware or software. That's why a good service-level agreement is key. SLAs should definitively outline promised uptime and support availability, and negotiating specific and detailed restitution if those promises aren't kept is also key.

--JP Vellotti

Contents

1.   Intro      2.   Network & Telco ASPs      3.   Collaboration ASPs      4.   Packaged applications ASPs      5.   MIS ASPs      6.   Data Management ASPs      7.   Looking forward

Collaboration

When you're little, you have to make up for your lack of size with agility. As you get bigger, you need to make sure that your sheer size doesn't become a bureaucracy that gets in the way of innovation and communication, leading to lost opportunities. Collaboration tools can help employees at either kind of company work more closely together, whether they're on-site or off-site, in disparate branches, or participating in multiple teams.

The most obvious example of a collaboration application--and the most common ASP implementation--is email. Most companies have more email traffic than phone calls/voice mail, so it's not surprising that email tools are among the fastest-selling ASP services. What email ASPs have to offer

ASP-delivered email gives employees the ability to read and respond to critical e-mails from remote locations, whether hotel room or airport lobby--or even home. To do this without an ASP would require setting up an in-house management messaging (email) server, which could cost up to US$20,000, plus about 40 hours of manpower to develop the email application. And that doesn't take into account the huge amount of time required to maintain and support the program, especially fielding the support calls from employees hundreds of kilometres away with widely varying levels of technical expertise.

Available ASPs range from simple Web mail services like Excite Inbox, Microsoft Hotmail, and Yahoo! Mail, all of which provide basic mailing functionality. Although services like these are not specifically slated for business use, a small business might find them good alternatives to paid hosting, because an unlimited number of mailboxes are available, although disk space per mailbox can be limited to as a little as 2MB. For a much larger system, a company might use an ASP which manages even the largest company's entire email system by providing Microsoft Exchange and Outlook programs through its own Exchange Server. The virtual office

The most complex ASP collaboration programs are known variously as virtual offices, digital workplaces, or teamware. These are suites that generally build on Web email by adding such features as instant messaging, shared calendars, document sharing, Web-based presentations, and project management tools.

These applications are similar to non-ASP programs like GroupWise and Lotus Notes, but without the vast drain on IT resources that setting them up and managing them entail.

What virtual office ASPs offer

On the low end, ASPs may be able to provide you with services such as shared calendaring, basic document management, and Web-based email services free, supported by ads; or with a fee charged per user per month. Either way, to set up a low-end virtual-office ASP is generally simple, as the level of customisability is low with such tools.

On the high end, you may also be able to pay to use tools like collaboration with customisable databases that can be used for such purposes as customised project management.

Collaboration ASP tip

When you're choosing a digital workplace, the collaboration features need to be carefully integrated. If employees are likely to participate in several virtual workplaces, for example, all of them must be linked, with employee calendars and task lists synced across them so that there's less information to keep track of, with fewer places each employee must check, and the interface is easy to navigate.

--Sean Carroll

Contents

1.   Intro      2.   Network & Telco ASPs      3.   Collaboration ASPs      4.   Packaged applications ASPs      5.   MIS ASPs      6.   Data Management ASPs      7.   Looking forward

Packaged applications

Even basic software packages--office suites and word processors, to name a few--need to be managed and supported. But for many businesses, they can easily fall off the radar. For instance, a small company may have a two-person IT staff that works at corporate headquarters. The only time this group is going to pay much attention to the branch operation 100 kilometres away is when an urgent network problem arises.

Simple software glitches? Those will be handled maybe tomorrow or the next day. Employee productivity gets lost in the shuffle.

Packaged-applications ASPs work two ways to remedy the situation. They can remotely manage and administer the software or simply host the software themselves.

What packaged-applications ASPs offer

In a typical scenario, these ASPs, via an Internet connection, push customised installations of virtually any application to customers, often tailored to the particular needs of the businesses. They provide local copies of the application that are available whether users are online or off-line. When subscribers are online, though, they get added features like automated backups and the ability to access shared databases.

The ASP will also serve as the IT and troubleshooting staff for these applications. If a program is damaged, the ASP can remotely reinstall it. And since files are stored remotely as well as locally, catastrophic damage to a workstation affects only work done since the last time documents were (automatically) backed up. It is important to note that in this scenario, all key applications are stored locally. In this model, access to the Internet is necessary only for backup and maintenance.

In another popular model, some packaged-applications ASPs host all data and applications remotely; all the user needs is access to the Internet. A single log-on and authentication gives access to the software, files, and databases the employee has permission for, regardless of location or the machine being used. Through continuous monitoring of applications and the ability to install patches, fixes, and upgrades at will, such ASPs can fix problems promptly and consistently. They don't have to wait for the customer to be online to repair applications.

Packaged-applications ASP tip

For a company whose employees are widely dispersed, the fully remote packaged-application ASP could be worth considering, because it provides access anywhere and from any machine. Of course, if you're located someplace where an Internet connection isn't possible, you lose access to applications or remotely stored data.

--Sean Carroll

Contents

1.   Intro      2.   Network & Telco ASPs      3.   Collaboration ASPs      4.   Packaged applications ASPs      5.   MIS ASPs      6.   Data Management ASPs      7.   Looking forward

Management Information Systems

ASPs that provide management information systems (MIS) offer a huge number of sophisticated applications formerly available only in highly customised networked environments at the corporations with the deepest pockets. Among the applications: enterprise resource planning (ERP), supply-chain and inventory management, sales and marketing, customer relationship management (CRM), help desks, sales force automation (SFA), and human resources.

What MIS ASPs offer

Traditional ERP relied on client/server architecture and tended to produce a rigid finished product, not easily altered to fit the changing needs of a growing company. Because the ASP model ERP is Web-based, it offers a more scalable and flexible architecture that can easily be adapted as a business plan or size shifts.

Companies that want to use CRM applications for sales force automation--an approach that lets them track all interactions with all their customers in one centralised location--also have good options among ASPs.

Companies that want to use an ASP for help-desk needs should expect to pay on a sliding scale. ASPs often charge a flat fee for a basic level of service, based on how many help-desk calls will be expected per month. Smaller companies often outsource some aspect of their accounting procedures--usually payroll--but not through an ASP. Businesses may also find this service available from some payroll centres via the Internet.

Many companies opt for such services, because that allows for quick and easy access by remotely located payroll departments (allowing several branches to be managed by the same staff). It's simple to provide data to third-party accountants as well; all a company need do is give them the password.

MIS ASP tip

When negotiating, remember that the amount you pay often depends on usage. Additional activity will greatly increase the price of the service. The best idea is to be liberal in gauging your anticipated usage--and your growth potential--so that you don't incur unexpected and much higher ASP expenses later on. The up-front bulk cost is always less expensive than the succeeding cost for increased activity.

--JP Vellotti

Contents

1.   Intro      2.   Network & Telco ASPs      3.   Collaboration ASPs      4.   Packaged applications ASPs      5.   MIS ASPs      6.   Data Management ASPs      7.   Looking forward

Data Management ASPs

Company workforces gather data person by person, team by team. But it is the view of the aggregate data--that is, the way the breadth of information is analysed--that's the lifeblood of a business.

From customer information to the back-office data collected in ERP and CRM applications, being able to answer the larger questions--which region is growing in value, which is slumping, what sorts of people are buying what products, which products are tanking, which regions might have more business and therefore require more staff and attention in the coming year--can give a company a running start over the competition. Without other options, small to midsize businesses have traditionally tried to manage their own data. But keeping track of all that information in-house requires the skillful (and expensive) services of a database administrator to build and maintain the vast and analytically flexible databases.

That's where ASP data warehousing comes in. With the ASP model, small businesses get the sort of analysis previously available only to large corporations. When using a data centre ASP, small businesses get the advantage of access to a database architect to create custom queries that are specific to a company's needs. A medical office, for example, might ask an ASP to create a database query to search records of patients from a certain post code who have visited a given hospital in the past six months.

What Data Management ASPs offer

For start-ups and other small businesses, where there is virtually no old data storage system to be concerned about, low-end data management ASPs could be the best option. These ASPs simply take all the warehoused data a company has and store it on their own servers in a format that has been chosen by the subscriber.

Based on this, the ASP writes programs that, for instance, search for customers by post code or products by price. Because this approach is scalable and doesn't require in-house development, additional data-mining analysis programs can be added easily and inexpensively.

More established companies, and those with functioning, elaborate data management systems in place, will probably find they are better candidates for higher-end data management ASPs.

Although the initial outlay may be considerably higher--as much as 50 percent more than with the lower-end group--these ASPs, with more manpower, servers, and hosting locations, can match a customer's existing database implementation and applications. For many companies, internal databases are only half of the story--if that. Also essential is so-called clickstream analysis of their Web sites. This involves tracking the behaviour of visitors to a Web site, examining what they do there, recording where they're geographically located, keeping track of who referred them to the Web site, and noting which pages resulted in the greatest number of further requests, as well as what sorts of visitors were most likely to request further information.

Data Management ASP tip

The key factor to consider when choosing an ASP for data warehousing is the extent of breakage--the amount of disruption caused by the move--the business will experience. A company that already has considerable internal data-crunching procedures in place will find that it's worth paying a bit more for a solution that is as close as possible to the existing system.

Companies that have no systems in place, or those whose internal systems aren't working right, might be able to choose a cheaper solution offering less customisation, saving money and incurring no additional breakage.

--Sean Carroll

Contents

1.   Intro      2.   Network & Telco ASPs      3.   Collaboration ASPs      4.   Packaged applications ASPs      5.   MIS ASPs      6.   Data Management ASPs      7.   Looking forward

Looking forward

With the growing popularity of ASPs, new types are already beginning to emerge that are likely to be standouts. The most promising: business procurement management (BPM) ASPs, vertical ASPs (so-called VSPs), and full service providers (FSPs), which are essentially an amalgam of all current types of ASPs. BPMs give managers real-time snapshots of the key details of a company's operations. These include inventory reports, shipping analysis, and production and supply data.

Vertical ASPs target niche markets. For example, a VSP that specialises in architectural applications would provide computer-aided design/computer-aided modelling (CAD/CAM) to small firms that would normally be unable to afford such sophisticated software--and couldn't find these programs in a traditional ASP.

FSPs deliver the whole range of ASP services, from networking to hosted apps to collaboration to data storage. To be successful, FSPs need a broad knowledge of applications, a solid networking infrastructure background, excellent customer service, and access to capital (their expenditures on technology are extremely high).

Later this year, look for a raft of new ASPs that take advantage of new wireless technologies. Peer-to-peer (P2P) will help fulfil businesses' "anytime, anywhere" information needs by replacing expensive desktop computers with cheap, purpose-built thin clients.

Another area that appears ready for a boom is smart phones and PDAs. Expect to see offerings that enable these WAP devices to engage in data transactions from users in the field.

--JP Vellotti

Contents

1.   Intro      2.   Network & Telco ASPs      3.   Collaboration ASPs      4.   Packaged applications ASPs      5.   MIS ASPs      6.   Data Management ASPs      7.   Looking forward

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