Unfortunately, software purchases aren't that much different right now. But, things are starting to change with a new model known as an Application Service Provider (ASP). ASPs bring to the software industry what auto leasing brought to the new car industry; they allow the customer to have access to the latest and greatest software with less risk at a lower cost.
ASPs represent an emerging trend in business-to-business e-commerce and have already received enthusiastic response from the corporate clients who have tested the waters. Originally designed for very large corporate and government clients, ASPs have broadened their scope and are now developing software for organizations of all sizes. As a result, The Gartner Group estimates that by 2004, software sales via an ASP will exceed $11 billion.
The concept behind the ASP model is pretty simple: You need software, but you don't want to pay for all of the costs normally associated with the software. By using an ASP, you can access not only the software you need, but also the hardware you need to run it on and the technical support required to keep your systems running. You pay for the resources you use, and because you are sharing those resources with other companies, you pay a lot less.
Will an ASP solution really save money? In many cases, the answer is yes since you don't need to provide as much support for the product. But some solutions may require significant expenses for transition and training, which may end up negating the perceived product.
Is the ASP product both secure and reliable? A proven firewall is essential to protecting your data as is having a well-managed backup plan. These points are critical in order to ensure that you (and only you) can access your data when you need it.
Can ASP software be customized to meet your needs? Currently, the most common use for ASPs is in the data management market, so being able to tailor the software to your business needs is very important. It is also important to select a provider whose software is compatible with that of your business partners.
Finally, be sure to clarify who owns the software and the data it contains. If you decide at some point in the future to bring the software in-house or transfer it to another ASP, you'll need to settle this point up front.
(Reprinted with permission from Skylines, newsletter of the Building Owners and Managers Association International.)