As it's New Year, it seems the ideal time to create another acronym - how about MSP. The next niche service is the Managed Service Provider market and Asia Online CEO Pascal Grant makes bold claims for its future and the company's move into the new space.
Managed Service Providers, as the title suggests, manage parts of a user's on-line strategy, whether it is security, e-commerce or e-mail hosting. It's a logical development from Application Service Providing (ASP), an area Asia Online also play in, and a sign of how far the 'service economy' will permeate the IT industry.
Grant is taking his company into the MSP waters and believes it is entirely different from being an ASP, -There is a distinct difference between the two. An MSP is about being an infrastructure packager and a professional service unit," he said.
Although he admits Asia Online became an MSP by accident rather than by design, it is now certainly part of it's business strategy. -As we move forwards we need to move towards a more value added service," he said.
According to Grant, the push for MSP services is being led by companies, especially those in e-commerce, with a desire to own the functions and processes of their business, but not wanting to manage the practical back office headaches such as server maintenance.
-I don't think anyone is interested in the assets, the value of it comes down so quickly," he said.
As the market matures, companies are keener than ever to off-load tasks and responsibilities to contractors. Therefore, Grant said call centres, application hosting and IT support are all being out sourced, -It is a transfer of responsibilities."
Although the industry is keenly watching the emergence of the MSP model, few are yet to take the investment plunge. Grant believes Asia Online will build up its MSP services bit-by-bit, taking on certain parts of a user company's IT in stages.
-We could start with security and then the next big one will be e-mail. With the amount of traffic, and the fact that people are not always near the host, but they still need to download mails," he said.
In 2001, only five percent of Asia Online's business will be MSP, but it hopes to gradually move further and further into it as the model becomes more accepted.
Although a growing sector, Grant believes there will be problems along the way, with many of these people orientated. -Its not that simple to get people to outsource their applications, especially if they are service or mission critical," he said.
One problem he expects to face is the fact that a lot of SMEs don't have an IT director. But he believes that once people start seeing that access to data and information is a priority, they will begin to change, -They see the value of ownership of IT, but they don't want the hassles of it and that is where MSPs come in," he said.
Asia Online will be targeting SMEs as it moves further into the MSP game, although Grant puts an emphasis on the higher end of the SME scale. -We have a real 'sweet-spot,' which is tendering for medium enterprises with around 50 to 100 staff," he said of one of the largest sectors in Australian business. -Small businesses can take up to three months to make a decision and once they have made a decision they need a degree of education," he said of the difficulties of dealing with small companies.
Although there are difficulties with this sector, Grant also sees advantages to it. Corporations like Microsoft and Intel are considering, according to Grant, getting into the MSP market, but he believes they will not be able to deal with SME market. -IBM and Microsoft find it difficult to address that market due to their cost structures," he said.
