Talk about a no-brainer. Well over a year ago, it was crystal clear to Samir Shah, executive vice president of strategic planning and business development at National Discount Brokers Corp., that many customers would jump at a chance to use cell phones and handheld devices for wireless online trading.
For Shah, the real questions were how many, how soon and how much of his internal IT budget should he devote to making it happen? The 100-person IT staff at the company's NDB division was already overwhelmed with hundreds of projects, including just keeping the e-commerce site up and running. Getting up to speed on wireless Web technologiesâ€"and keeping up with the rapid changes in wireless protocols, devices and markup languagesâ€"would require a major investment. It was an investment that, without some wireless Web experience under its belt, NDB wasn't quite ready to make.
So late last year Shah opted to turn deployment of the first phase of NDB's wireless trading initiative over to Aether Systems Inc., one of a small but growing number of ASPs (application service providers) specializing in helping e-businesses go wireless. The result: NDB was able to get its first wireless Web offering off the ground quickly, gaining valuable knowledge about what wireless services brokerage customers want most.
"That's the beauty of outsourcing," Shah said. "You don't have to worry about the technology and testing [devices]."
A growing number of e-businesses are turning to wireless ASPs. Time- and cash-strapped companies such as NDB and CDNow Inc. see outsourcing as the best way to get wireless Web applications up quickly and to cut through complex and rapidly changing wireless technologies, all without needing to invest directly in new hardware, software or people.
Wireless ASPs, however, are not necessarily the answer for every e-business, experts said. E-businesses dealing with sensitive customer data, for example, will want to carefully investigate outsourcers' security technologies and processes before turning data over to one of them, they said.
At the same time, services from wireless ASPs aren't cheap. Many levy initial setup fees that can run from $100,000 to $200,000, said Charul Vyas, an analyst at International Data Corp., in Austin, Texas. And many charge monthly per-user fees on top of that.
Still, e-business strategists say, using a wireless ASP to get applications up quickly makes sense. "You need a lot of financial commitment to do wireless today if you do it yourself," Shah said. "What we do well is trading [technology]. We know what it costs to maintain [an online trading system] and for the initial investment. We never dreamed of replicating that with wireless."
