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---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 03/09/2000=
=20 11:11 AM --------------------------- "NW on Application Service Providers" <ApplicationService@bdcimail.com< on= =20 03/09/2000 11:01:47 AM Please respond to "Application Service Providers Help"=20 <NWReplies@bellevue.com< To: <vkamins@enron.com< cc: =20 Subject: What=01,s holding back ASP adoption? NETWORK WORLD FUSION FOCUS: MIKE JUDE and NANCY MEACHIM on APPLICATION SERVICE PROVIDERS Today's focus: What=01,s holding back ASP adoption? 03/08/00 Dear Wincenty Kaminski, Today's focus: What=01,s holding back ASP=20 adoption? --------------------------------------------- By Mike Jude and Nancy Meachim The application service provider (ASP) market has been growing by leaps and bounds. What used to be a nascent market has expanded from addressing niche enterprise needs to providing significant IT support for many Fortune 500 companies. However, there are still significant impediments to wide acceptance of applications outsourcing. Two major deterrents have to do with older business concerns. One significant problem that has been addressed only tangentially by ASPs is the fact that corporate IT departments are, more often that not, dependent on less than cutting edge technologies. Many established companies have, over the years, made significant investments in legacy technologies. The fury over Y2K attests to the high number of mainframe computers still using first-generation code. Such organizations may have added a great deal of newer technology, but concerns over the older applications may be preventing them from taking advantage of application hosting. Even if there were an ASP willing to address the entire solution, including legacy systems, doubt about the viability of handing off archaic yet mission-essential systems may prevent an enterprise from handing over support of these applications. While the ASP may offer a more cost-effective solution, the fear is that it may not be able to offer the depth of experience necessary to work with older technology. Security is the second dynamic that tends to retard ASP acceptance. Although most ASPs are able to maintain the proper level of security necessary for critical information, many IT departments find the idea of putting that information in the hands of a third party too daunting. There are some businesses with huge IT investments that absolutely cannot take chances with information leakage. Local telephone service providers, because of their Federal Communication Commission regulators, come to mind. A simple pitch of cost avoidance or cost reduction is rarely sufficient to sway IT mangers in such organizations. They are thinking about the care and feeding of cranky old mainframes that run a million lines of COBOL and manage highly proprietary customer information. Only when ASPs are willing to spend the time to understand the needs of such a complex IT environment will they truly be able to introduce services fully capable of addressing all the security and legacy issues involved. Until such an enlightened ASP comes along, there are still several ways to start moving to outsourcing for IT managers coping with a legacy or highly sensitive environment. First, consider whether a full outsourcing solution is the only option. It may be that there=01,s a subset of the IT architecture that is appropriate for an ASP to take on. It may also be possible to find an ASP to partner with and gradually migrate support of legacy systems as the ASP learns the systems and their requirements. One thing is certain: legacy systems are not going away anytime soon. It=01,s also just as certain that application service provision is the way of the future. ASPs let enterprises offload an expensive and time- consuming technical function. As the ASP market matures, this column will examine issues such as these from both the user and the vendor perspectives. To ensure we address the topics you are interested in, we invite your comments and questions. Please contact us at the e-mail addresses listed below. 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 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The ASPs' Impact on the IT Industry, International Data Corporation A report offering definitions, identifying trends and issues, and highlighting the implications for software and hardware vendors, services firms, communications companies, and channels partners. http://www.idc.com/Data/Software/content/offer/asp/default.htm ASP Industry Portal Contains ASP providers database, ASP-enabled software database, ASP industry news http://www.webharbor.com/ ASP News Review http://www.aspnews.com/ ********************************************************* 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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