Grabbing the BrassRing
One of the calls came from BrassRing Systems, a division of BrassRing. Sears decided to use BrassRing's resumes tracking applications and job site hosting services because of positive customer feedback and BrassRing's willingness to customise its offerings to meet the needs of displaced customers such as Sears.
BrassRing waived its usual one-year contract for former iSearch customers, allowing them to use the service on a month-to-month basis. The ASP also committed to getting the most basic functions, such as hosting job sites, up and running within 48 hours. That helped Sears keep its job postings online without any downtime.
Looking back, Sears had seen signs of iSearch's impending shutdown. The ASP had warned in January that customer service could be affected by an upcoming acquisition of the company, Fine said. Long before that hint of trouble, Sears was already dissatisfied with iSearch's service, which Sears started using in November 1999, and had begun considering moving to another provider. Along with poor customer service, Fine couldn't find some candidates when she searched the resume database.
Paying attention to hints such as those can help prevent the hassle and costs of recovering from an ASP that has begun to sour. But not all ASPs give out such obvious warnings as deteriorating customer service. Current and potential customers need to delve into a provider's financial situation, said Laurie McCabe, a vice president at Summit Strategies. If the provider is public, that means reviewing recent quarterly reports and finding out how much cash it has left. If it's private, it means grilling the ASP about its financial performance.
Another thing to keep in mind is that ASPs offering enterprise applications often struggle to scale to support a large number of customers, said Tom Mangan, a managing partner in global enterprise technology solutions at Arthur Andersen. Too often, the cost of adding a new customer can exceed what providers can reasonably charge if their models require deployment of dedicated servers and customised applications for each customer, Mangan said.
Rather than wait for the worst, IT managers at Eagle Family Foods picked up and left their ASP of two years last summer before it floundered.
The US$250 million company had decided to use an ASP when it was formed as an independent company in 1997 from former Borden Food brands. Eagle Family Foods needed an ERP system and chose in early 1998 to implement PeopleSoft's software on a hosted basis, said Robert Marshak, director of IS infrastructure. Marshak declined to name the ASP.
Within the first year, though, problems arose. Customer support was spotty, and the ASP was reluctant to update its network and software. Even Lotus Notes email, which the provider also hosted, wasn't being protected against viruses until Marshak questioned the ASP about the issue. On top of it all, the ASP seemed financially shaky and was losing, rather than gaining, customers, according to Marshak.
So Eagle Family Foods went on a search for a new ASP starting in mid-1999. It decided to use Surebridge. This time, however, Eagle Family Foods tried to protect itself. The company decided to buy the licenses to the PeopleSoft and Notes applications itself, along with the hardware. That made leaving easier, especially since its yearly contract had already expired.
And then there are those times when warnings never come.
At eVineyard, Osborn had little reason to believe Pandesic would end its service because the company was backed by two of the world's largest technology companies. But it did.
The painful lesson? Consider the possibility of an ASP's failure from the beginning of the relationship, however unlikely it seems.
"Contemplate what happens when that phone call comes," Osborn said. "Be prepared, and don't have rose-colored glasses."
