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Making Sense of ASP (Application Service Provider) January 21, 2000  Hyokyung Bahn
“ Five years from now, if you’re a CIO with a head for business, you won’t be buying computers anymore. You won’t buy soft...
What is an ASP? <ul><li>ASP (Application Service Provider) </li></ul><ul><ul><li>deliver desktop and/or laptop functionali...
What is an ASP? <ul><li>Differences from conventional Internet-based source of activity </li></ul><ul><ul><li>interaction ...
Net-Hosted Services Today <ul><li>States of the Industry </li></ul><ul><ul><li>Shift Servers and IT support into the netwo...
Needs for ASP <ul><li>Needs for ASP </li></ul><ul><ul><li>business changes faster than before </li></ul></ul><ul><ul><li>I...
Solution to the Problem <ul><li>Maturing of Internet technology provides a dynamic delivery mechanism </li></ul><ul><ul><l...
The Customer Benefits <ul><li>Avoid risks and save costs related to staff recruitment and retention  </li></ul><ul><li>The...
Is This for Real? <ul><li>Validated by analysts  </li></ul><ul><ul><li>Over 160 ASPs currently offer service </li></ul></u...
Market Drivers <ul><li>Enterprise software developers supports the ASP </li></ul><ul><ul><li>ASP offers the opportunity to...
Business Drivers <ul><li>Mid-sized organization </li></ul><ul><ul><li>unable to afford some of the high-end enterprise sof...
Technology Drivers <ul><li>Connectivity is the major technology force behind the ASP </li></ul><ul><ul><li>The explosion o...
Sufficient Conditions for ASP ubiquitous bandwidth computers dominate broad deployment of IP complexity of IT ASP opportun...
Going Forward: New Service Provider Evaluation Criteria <ul><ul><ul><li>Intelligent Routing/Switching  </li></ul></ul></ul...
References <ul><li>What is an ASP, ASP White Paper </li></ul><ul><ul><li>http://www.netstore.net/about/asp. htm </li></ul>...
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[emerging issue] Making sense of ASP (Jan. 21, 2000)

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Transcript of "[emerging issue] Making sense of ASP (Jan. 21, 2000)"

  1. 1. Making Sense of ASP (Application Service Provider) January 21, 2000 Hyokyung Bahn
  2. 2. “ Five years from now, if you’re a CIO with a head for business, you won’t be buying computers anymore. You won’t buy software either. You’ll rent all your resources from a service provider. ” - Scott McNealy, CEO, Sun Microsystems CEO Chief Executive Officer IT Information Technology CIO Chief Information Office ERP Enterprise Resource Planning
  3. 3. What is an ASP? <ul><li>ASP (Application Service Provider) </li></ul><ul><ul><li>deliver desktop and/or laptop functionality over an IP network from a central resource for a fixed monthly subscription </li></ul></ul><ul><li>Net-hosted Application Service </li></ul>
  4. 4. What is an ASP? <ul><li>Differences from conventional Internet-based source of activity </li></ul><ul><ul><li>interaction between server and end-user machine, and subscription nature of commercial relationship </li></ul></ul><ul><ul><li>ASPs do more than deliver data from central server (e.g. FTP site) </li></ul></ul><ul><ul><li>Example. </li></ul></ul><ul><ul><li>Use central server to run SAP or ERP package </li></ul></ul><ul><ul><li>: users log on to central server and run the application </li></ul></ul>
  5. 5. Net-Hosted Services Today <ul><li>States of the Industry </li></ul><ul><ul><li>Shift Servers and IT support into the network </li></ul></ul><ul><ul><li>Provide users faster deployment, more predictable costs, and application-focused service levels </li></ul></ul><ul><ul><li>Value-add on top of existing ISP-type services </li></ul></ul><ul><ul><li>Web-based IT services will replace software and server products </li></ul></ul>
  6. 6. Needs for ASP <ul><li>Needs for ASP </li></ul><ul><ul><li>business changes faster than before </li></ul></ul><ul><ul><li>Internet create the opportunity for </li></ul></ul><ul><ul><ul><li>new companies to grow very quickly </li></ul></ul></ul><ul><ul><ul><li>existing companies to change direction and exploit new market opportunities </li></ul></ul></ul><ul><ul><li>Companies want to look big, act fast and maximize their lead in the marketplace </li></ul></ul><ul><ul><li>They need IT to support their business </li></ul></ul><ul><ul><ul><li>But the purchase and deployment of systems are prohibitively expensive </li></ul></ul></ul><ul><ul><ul><li>And there is a shortage of IT skills </li></ul></ul></ul>
  7. 7. Solution to the Problem <ul><li>Maturing of Internet technology provides a dynamic delivery mechanism </li></ul><ul><ul><li>IP-based networking has become ubiquitous </li></ul></ul><ul><ul><li>Internet has become accepted as a viable, flexible and secure means of business communication and transaction </li></ul></ul><ul><ul><li>Internet means location-independent computing has been realized </li></ul></ul><ul><li>ASP uses Internet to deliver scaleable, development-free services to fast-moving companies </li></ul>
  8. 8. The Customer Benefits <ul><li>Avoid risks and save costs related to staff recruitment and retention </li></ul><ul><li>The opportunity for rapid time-to-benefit </li></ul><ul><li>Deployment in weeks rather than months or years </li></ul><ul><li>Simplify/standardize business process, data models, implementation and ongoing maintenance </li></ul>
  9. 9. Is This for Real? <ul><li>Validated by analysts </li></ul><ul><ul><li>Over 160 ASPs currently offer service </li></ul></ul><ul><ul><li>International Data Corporation forecasts revenue for ASPs to reach $150.4M in 1999, going to $2B by 2003 </li></ul></ul><ul><ul><li>Delivers 30% cost reduction in IT operations costs </li></ul></ul><ul><li>Flurry of start-ups, software and SI investments </li></ul>
  10. 10. Market Drivers <ul><li>Enterprise software developers supports the ASP </li></ul><ul><ul><li>ASP offers the opportunity to deliver a given product to a much enlarged downstream market </li></ul></ul><ul><ul><li>ASP model generates a recurring revenue stream in which they can share </li></ul></ul><ul><ul><li>The increasing usage of mobile/laptop computing enables their work forces to operate much closer to their customers </li></ul></ul>
  11. 11. Business Drivers <ul><li>Mid-sized organization </li></ul><ul><ul><li>unable to afford some of the high-end enterprise software application </li></ul></ul><ul><ul><li>because of the high costs (software, hardware, infrastructure and training) </li></ul></ul><ul><li>Larger corporations </li></ul><ul><ul><li>are increasingly electing to outsource some or all of their IT </li></ul></ul><ul><ul><li>because of fast-changing technology, shortage of appropriate skills, focus on a core activities and a desire for rapid time-to-benefit </li></ul></ul>B UILD ? R ENT ? B UY ?
  12. 12. Technology Drivers <ul><li>Connectivity is the major technology force behind the ASP </li></ul><ul><ul><li>The explosion of the Internet has seen the deployment of enormous quantities of IP-based bandwidth </li></ul></ul><ul><ul><li>and the uptake of its use has seen changes it the pricing, security, availability, and ubiquity of connectivity </li></ul></ul><ul><ul><li>Cost effective connectivity is provided by the high speed LAN, ADSL, etc </li></ul></ul>
  13. 13. Sufficient Conditions for ASP ubiquitous bandwidth computers dominate broad deployment of IP complexity of IT ASP opportunity
  14. 14. Going Forward: New Service Provider Evaluation Criteria <ul><ul><ul><li>Intelligent Routing/Switching </li></ul></ul></ul><ul><ul><ul><li>Network Element Management </li></ul></ul></ul><ul><ul><ul><li>Network Usage Discounts and Incentive Billing </li></ul></ul></ul><ul><ul><ul><li>Network Availability </li></ul></ul></ul><ul><ul><ul><li>Software Application Brand </li></ul></ul></ul><ul><ul><ul><li>Business Process Workflow & Data Models </li></ul></ul></ul><ul><ul><ul><li>Billing by Transaction or Fixed Price/User </li></ul></ul></ul><ul><ul><ul><li>Application Performance </li></ul></ul></ul><ul><ul><ul><li>Remote End-User Desktop Support </li></ul></ul></ul>
  15. 15. References <ul><li>What is an ASP, ASP White Paper </li></ul><ul><ul><li>http://www.netstore.net/about/asp. htm </li></ul></ul><ul><li>ASP News </li></ul><ul><ul><li>http://www.aspnews.com </li></ul></ul><ul><li>ASP Industry Consortium </li></ul><ul><ul><li>http://aspindustry.org </li></ul></ul><ul><li>ASP Companies </li></ul><ul><ul><li>Unterberg ( http://www.unterberg.com/asp/ ) </li></ul></ul><ul><ul><li>Netstore ( http://www.netstore.net ) </li></ul></ul><ul><li>Consulting Company </li></ul><ul><ul><li>Northeast Consulting ( http://www.ncri.com ) </li></ul></ul>
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