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NETWORK WORLD NEWSLETTER: JEB BOLDING
on APPLICATION SERVICE PROVIDERS 06/06/01 - Today's focus: ASP trade show malaise: Reader response Dear Wincenty Kaminski, In this issue: * The mediocre success of service provider trade shows * Links related to ASPs * Featured reader resource _______________________________________________________________ TECHNOLOGY & VENDOR NEWS ALERTS! You have very specific information needs about a technology or technology vendor and you subscribe to a newsletter or go on- line to find out about the strategic developments in this specific area. But how do you stay up with the late-breaking news? Network World now offers six very focused News Alerts to keep you abreast of the most significant developments of the week on LANs, Storage, Network/Systems Management, The Edge, Cisco and Microsoft. As an added service, if there's impactful, late-breaking news about one of these specific technologies or vendors, by subscribing to our News Alerts, we'll let you know what it is within hours. Subscribe today at http://nww1.com/go/ad082.html _______________________________________________________________ Today's focus: ASP trade show malaise: Reader response By Jeb Bolding Responding to a previous newsletter about trade shows (Trade show malaise hits ASPs - http://nww1.com/go/0606ASP.html) Jon Price, vice president of service provider events at Penton Technology Media, offered some interesting elaborations on the mediocre success of xSP-oriented trade shows. Previously I mentioned that service providers should go to trade shows that are vertically-oriented in order to capitalize on their specific industry expertise. However, I didn't put much of a framework behind that assertion. Price commented that there are a couple of reasons for treating service provider software like you would any other outsourcing option. First, most service providers have not been in business very long. Trade shows typically follow cohesive market messages and service providers have not yet had time to pull their messages together. Consider Java. I went to the first JavaONE show and it was fairly lame because only a few companies saw the power of using Java for enterprise applications, let alone had developed applications using Java. The first JavaONE was primarily a Javasoft and Sun evangelizing event. To its credit, JavaONE was the only Java show, so there wasn't any cannibalization. But service providers haven't been so lucky. The poor economy, and the fragmentation of the service provider industry almost assured most xSP trade show failures. But Price argues that there is even a deeper issue that has been ignored in the trade show arena, which goes to the heart of hosted service selection versus traditional client/server software selection and that is fear in the IT department. Price says: "Why doesn't IT consider application service providers (ASP) as an alternative to software? ASP service is a strategic outsourcing move that potentially eliminates the need for building a more expansive IT staff, its supporting infrastructure, and the management requirements of both. This is a very tough career decision for any IT manager, because any success demonstrated by the ASP can also be viewed as the failure of a manager's development and delivery team. If that's not bad enough, corporate management may like what they see so much in short term savings and quick deployment, that they begin to outsource everything, along with the poor IT manager making the recommendation in the first place." Neither Jon nor I are arguing that IT will actually face its Waterloo by adopting an ASP solution. However, that does not change the concern within IT. Any time someone outsources development - and I mean the development of anything, be it a business or marketing plan, or software development - the person using outsourcing as a crutch is taking a risk. The people doing the outsourced work might do it better than the salaried employees. To make matters worse, Price notes that: "As an added support mechanism, or peripheral project, it's possible that some IT managers would strongly consider using an ASP to allow more time to focus on core initiatives. But most ASPs, application infrastructure providers and managed service providers are gunning right for the core services that are provided by in- house IT." ASPs might find their sales easier if they focus on peripheral applications that are not at the core of IT competency. I would argue that many vertical ASPs are doing just that. They provide solutions that most IT staff doesn't want to undertake, and so, are not threatening. Fortunately, this attitude is probably temporary. Applications and services are becoming blurred as the distributed, thin- client nature of the Web permeates all software. Price comments that, "Before long, Web sites, Web software, Web applications, Web 'services,' and the remaining 'Internet-enabled' traditional software applications will soon be viewed as one in the same: just plain old applications that provide utility and service, driving business forward." But for now, there is the issue of culture that must be handled delicately. You can reach Jon Price at: mailto:jprice@penton.com _______________________________________________________________ To contact Jeb Bolding: Jeb Bolding is senior consultant with Enterprise Management Associates in Boulder, Colo., an analyst and market research firm focusing exclusively on enterprise management. Bolding has 10 years of experience in the network systems industry, most recently with eCollege.com, an ASP for higher education, where he was director of product development. He can be reached at mailto:jbolding@enterprisemanagement.com. _______________________________________________________________ RELATED EDITORIAL LINKS ASPcon Fall 2001 http://www.aspcon.com/fall2001/default.asp Management service providers feast on challenges Network World, 06/04/01 http://www.nwfusion.com/archive/2001/121307_06-04-2001.html Tally debuts Web-based asset-mgmt. service Network World, 06/04/01 http://www.nwfusion.com/archive/2001/121461_06-04-2001.html Breaking ASP news from Network World, updated daily: http://www.nwfusion.com/topics/asp.html Archive of the ASP newsletter: http://www.nwfusion.com/newsletters/asp/index.html ______________________________________________________________ FEATURED READER RESOURCE User Excellence Award If you've completed an interesting network project in the last 12 to 18 months, here's your chance to gain industry recognition for it. Network World is currently accepting nominations for its annual User Excellence Award. For more information and an online nomination form, go to http://www.nwfusion.com/nw/awards.html#excellence Deadline for submission is June 11. _______________________________________________________________ SUBSCRIPTION SERVICES To subscribe or unsubscribe to any Network World e-mail newsletters, go to: http://www.nwwsubscribe.com/news/scripts/notprinteditnews.asp To unsubscribe from promotional e-mail go to: http://www.nwwsubscribe.com/ep To change your e-mail address, go to: http://www.nwwsubscribe.com/news/scripts/changeemail.asp Subscription questions? Contact Customer Service by replying to this message. Have editorial comments? Write Jeff Caruso, Newsletter Editor, at: mailto:jcaruso@nww.com For advertising information, write Jamie Kalbach, Fusion Sales Manager, at: mailto:jkalbach@nww.com Copyright Network World, Inc., 2001 ------------------------ This message was sent to: vkamins@enron.com
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