ASP – Application Service Providers

What are Application Service Providers?
Application service providers (ASP) are the movers and shakers of the on-line Internet Systems or ASP Value chain. They are responsible for operating business applications at the centre of every Internet Application solution. They are made up of the following structures.

Generic Applications Services Providers
The largest ASPs offer a range of application functionality that can be adapted to the needs of many different of businesses. They often use a "Master ASP" model to extend their reach into different kinds of markets. They often work with channel or complimentary partners to adapt their systems to the needs of individual industries, communities or customers.

Enterprise ASPs are probably the most well recognised form of ASP. They provide highly recognised enterprise-wide software brands, such as Microsoft, Oracle and Sap, via the ASP delivery model. Most offer an already developed assortment of complementary software and applications.

E-Business ASPs specialise in collaborative Internet solutions. Many offer specific Web site enhancement services. They may include such services as customer support, online order processing or payment handling. Other more specialist organisations may provide electronic trading services such as digital marketplace hosting or secure collaborative commerce networks. Many operate additional intranet or extranet services such as in-field service management or partner relationship management as examples.

Business ASPs provide business software applications for the small and medium-size enterprise (SME) market. Some may provide pre-branded applications from Microsoft and the like, while others have developed their own systems, often having the ability to integrate with other third-party services.

Vertical Service Providers (VSPs) tailor their systems to a specific vertical industry, such as financial transactions, health or legal services. Usually their management will typically be drawn from the industry they serve, a VSP aims to be a one-stop source of all software applications and any online services designed to complement its customers' existing business activities.

Specialist Applications ASPs
Many ASPs specialise in a particular area of expertise or what is known as vertical market knowledge. The main strength of these ASPs is their understanding of their target customer base. They therefore prefer to maintain a direct customer relationship rather than working through a third-party channel. They will provide applications that require special knowledge to manage and operate. For instance they might target intensive data analysis or high-volume document management. They will almost always employ their own experts who know and understand the requirements of their specialist customer base.

What is a "Hybrid" ASP

All of the companies we have discussed are pure ASPs, that is, companies whose very core activity is the operation of business applications for online delivery to the public. However many of the companies not discussed here are ASPs in addition to their day-to-day business activities. They are usually known as business server and application providers.

What is an ASP Value Chain?

There are five primary sectors that take part in the ASP value chain The first three are thought of as having direct contact with the user, while the remaining two stay in the background, as operators of the Internet computing infrastructure.

Service integrators are the providers that end-user businesses recognise as ASPs. They bring together services for delivery as complete, managed solutions. They range in sophistication from enterprise ASPs to Internet portals. This category also includes more traditional types of professional services company, such as e-business integrators and full-service providers.

Application providers create the software and applications from which solutions are assembled. This category encompasses the software developers and independent software vendors (ISVs), whose products ASPs and service integrators deliver. The segment also includes providers who host and deliver their own applications as online services.

Access providers take care of the 'last mile' connection that allows users to access the network. This category includes telecoms providers and Internet service providers, many of whom bundle access along with a basic suite of hosted applications. It also includes wireless ASPs, who deliver Web content and applications to mobile telecoms users.

Infrastructure operators look after the physical backend elements of the network. They include the telecoms providers who act as Internet backbone carriers, as well as co-location and hosting providers, who manage Internet data centre facilities. Another group in this segment provide utility-style computing resources, such as pay-as-you-go storage services.

Infrastructure service providers make up the software and services layer of the Internet computing infrastructure. They include application and ASP infrastructure providers (AIPs), who operate hosting centres that are specially equipped for application hosting. AIPs often work with infrastructure ASPs, who deliver specific elements of the infrastructure, such as billing and metering, directory services, or payment processing. Management service providers, who specialise in remote management of IT systems, are another fast-growing group in this category.

Arthur Hissey
Computer Research & Technology
www.crt.net.au