Everything you wanted to know about but were afraid to ask

By SmallBusinessComputing Staff
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by Kevin Hogan

Each month on this page we take some of today's most popular yet arcane techie-speak and translate it into POE (Plain Old English). Here's one that will, without a doubt, trip off the consultant's lips in your office this year. Read on for the particulars:

ASP stands for Application Service Provider, a new breed of outsourcing company that uses the Internet to support a variety of business functions. Say again? Think about electronic payroll services like ADP. Take an essential but laborious in-house process, automate it, and run it remotely for a fee. Thanks to the World Wide Web and other intranet interface technologies (a.k.a. your browser software), any number of tasks, from general administrative duties like accounting and human resources to industry-specific tasks involving document management and workflow, can be accomplished with relative ease.

Vague, yes? Deliberately so. Since this buzz-cronym has such cache at the moment, everybody wants to use either it or the other sexier moniker of "Dotcom." Your bank probably wants to be an ASP with offerings of online financial services. Software vendors like Eudora are pulling their software off store shelves, and are instead licensing it through the Web on a monthly basis. Even your ISP now wants to be an ASP with Web hosting and e-commerce support offerings.

We refer to ASP services as "apps-on-tap." Depending on the software or service, the basic concept works like this: Instead of programs, files, and data being stored in your PC or on a company server at your physical location, they are whisked off to a remote-server farm. They receive, store, and distribute your data for some sort of monthly or yearly subscription fee.

While there will be some ASPs who disagree with me here, it is necessary for a business to have some basic technological infrastructure before it can truly benefit from these types of services. Some providers will claim all a business needs is a dial-up modem. The fact remains, however, that in order for any online service to seem transparent, a company needs always-on access.

This sort of service can seem particularly attractive to smaller organizations because it means they don't have to invest in more than a basic network in order to get sophisticated, automated information technologies. They also don't have to support an IT staff to install and maintain the stuff either. Consider it plug-and-play enterprise software.

The other nice thing is that ASPs seem to want to take on the more mundane aspects of running a business. When was the last time you enjoyed doing the books or updating the employee handbook?

The industry breaks down the ASP market into five subcategories: enterprise ASPs that deliver high-end business applications; local ASPs that service small business in a particular geographic region; specialist ASPs that provide applications for a specific need, such as Web site services or human resources; vertical Market ASPs that provide support to a specific industry such as healthcare; and finally, volume business ASPs that supply prepackaged application services in volume to small and medium-sized companies.

Major hardware manufacturers such as Hewlett-Packard and SAP have formed alliances in order to provide ASP services as well. Microsoft is allowing some companies to offer its BackOffice products, including SQL Server, Exchange, and Windows NT Server on a pay-as-you-go method too.

And now there are ASPs who will even take care of the basic network bit. CenterBeam centerbeam.com can provide the whole shebang ­ PCs, printers, high-speed Internet access, and software. They'll install it, wire the network, and troubleshoot and support it. You just write a check each month.

Other than reading our magazine, there isn't really a one-stop source to read any more about these companies or combine them into any sort of directory. Depending on the type of service you are looking for, a simple search on "ASP" and, say, "human resources" should do the trick.

Kevin Hogan is executive editor for SBC. Have any questions you want answered but are afraid to ask? Drop us an e-mail at asksbcc@curtco.com.
This article was originally published on March 01, 2000

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