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NETWORK WORLD FUSION FOCUS: MIKE JUDE and NANCY MEACHIM
on APPLICATION SERVICE PROVIDERS Today's focus: Full circle: ASPs the new Big Blue? 03/15/00 Dear Wincenty Kaminski, Today's focus: Full circle: ASPs the new=20 Big Blue? --------------------------------------------- By Mike Jude and Nancy Meachim The terms =01&ASP=018 and =01&IBM=018 may have more in common than being th= ree- letter acronyms. Remember Big Blue of the early =01+60s? The vision, then, was centralized computing. Mainframe computers hosted complex, expensive applications that end users accessed via dumb terminals. IT infrastructure, especially memory, was expensive and needed to be controlled. With computing resources centralized, IBM reasoned, they were easier to maintain. Of course, IBM got it wrong, in that computers became a cheap commodity. And users weren=01,t happy simply using dumb terminals. They wanted a bigger share in all that technology offered. So, as memory prices fell, so did the idea of central control. Dumb terminals were transformed into intelligent desktop machines that could store applications and data. The glass house populated by white-smocked technicians went out of fashion. Looking back on those times, many of us would shake our heads and wonder how IBM could have been so wrong. But maybe Big Blue wasn=01,t so far off. Thanks to the advent of application service providers, centralized computing is making a comeback. ASPs offer centralized application management. The market started as a way to offer the benefits of Server Advertisement Protocol and other complex enterprise resource planning software to small companies or companies with less technical savvy. But ASPs now host all kinds of applications, including small, multilicensed programs whose images are downloaded to end users on demand. But, the principle remains the same: Central control makes support much more efficient and usually cheaper. How about that, IBM? To be fair, the dynamics of an ASP are very different from old centralized mainframe operations. An ASP doesn=01,t just host and support an application for general distribution over an in-house proprietary network. Unlike the IBM vision, an ASP is very dependent on network service. It is also very sensitive to service levels. In the =01+60s, if the mainframe let you down, you ended up twiddling your thumbs for an hour or so, and your only recourse was that white-smocked fellow. Nowadays, users start to scream if service is interrupted for even a minute. And woe to the ASP who brings down a customer operation. The world of the ASP is much more complex than that of the old =01+60s shop. However, if one could magically transport a computer user from the =01+60s to the wonderful new 2000s, would it seem all that different to him? In an ideal ASP world, a la Scott McNealy=01,s vision, users would sit down at a semidumb terminal, download the application du jour, and start working. What did the =01+60s user do? Kind of the same thing! So you are probably wondering, what is the point? Just this: IBM=01,s problem was leaving the customer out of the equation. And look what happened. Customers rebelled. They didn=01,t buy IBM=01,s spiel. It became the =01&in=018 thing to hate IBM. Why? Because the guys in white smocks couldn=01,t spell service and didn=01,t care about customers. To be successful, ASPs need to learn from the past. They need to tattoo service on the forehead of each of their employees. There are too many choices, today, for customers to put up with inferior service. That=01,s one big difference from the =01+60s. Customers now can literally choose any service provider in the world. Just being big doesn=01,t cut it these days. To contact Mike Jude and Nancy Meachim: --------------------------------------- Senior consultant Michael Jude and research director Nancy Meachim are with Enterprise Management Associates in Boulder, Colo., (http://www.enterprisemanagement.com), a leading analyst and market research firm focusing exclusively on all aspects of enterprise management. Jude has over 18 years of experience in the telecommunications industry, most recently with US West, where he was a manager of public policy. Mike can be reached at mailto:jude@enterprisemanagement.com. Meachim focuses on e-business management. She is currently conducting a research study on ASP management that is due to be released in April. Nancy's email address is mailto:meachim@enterprisemanagement.com. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ FOR RELATED LINKS -- Click here for Network World's home page: http://www.nwfusion.com ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Buzz: Application Otsourcing, Network World Fusion, 09/27/99 http://www.nwfusion.com/buzz99/roundasp.html ASP Research page, Network World http://www.nwfusion.com/research/asp.html All About ASPs Information center for application service providers, their customers and delivery partners. Includes resources, events and news. The ASP Industry Consortium. http://www.aspindustry.org/ ********************************************************* Subscription Services To subscribe or unsubscribe to any Network World e-mail newsletters, go to: http://www.nwwsubscribe.com/news/scripts/notprinteditnews.asp To change your email address, go to: http://www.nwwsubscribe.com/news/scripts/changeemail.asp Subscription questions? Contact Customer Service by replying to this message. Other Questions/Comments Have editorial comments? Write Jeff Caruso, Newsletter Editor, at: mailto:jcaruso@nww.com For advertising information, write Jamie Kalbach, Account Executive, at: mailto:jkalbach@nww.com Network World Fusion is part of IDG.net, the IDG Online Network. IT All Starts Here: http://www.idg.com Copyright Network World, Inc., 2000
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