ASPs making noise at N+I

LAS VEGAS - "Application Service Provider" (ASP) may have been the most widely used buzzword at last week's NetWorld+Interop 99 with new service announcements from a handful of providers and the creation of the ASP Industry Consortium.

Qwest, Conxion, US WEST and Sprint all announced new application-hosting services and plans last week. At the same time, 25 other vendors and service providers created the ASP Industry Consortium, which plans to develop common ASP definitions, sponsor research, and educate users and vendors.

The consortium consists of some industry heavyweights, including AT&T, Cisco, Sun and MCI WorldCom's UUNET. The group is still forming its business plan, but Chairman Traver Gruen-Kennedy, director of advanced business at Citrix, says committees will be set up by fall to conduct market research studies and adopt technical and architectural "best practices."

As for ASP service announcements at the show:

Qwest says it will offer SAP America's financial and human resources applications to customers via the Internet from a series of centers outfitted with Hewlett-Packard servers. HP is investing $500 million worth of hardware, software and support in exchange for a portion of the service's monthly revenue.

Conxion, a San Francisco ISP, is rolling out a new service for the medical industry that will let users access Object Products' health care software over the 'Net.

US WEST is reselling USinternetworking's electronic commerce application-hosting services, which are based on software products from BroadVision and Microsoft. USinternetworking also offers financial, human resources and sales application-hosting services.

Sprint announced plans to support other ASPs. The company already offers its own hosted-application services, such as Internet Conference Center and Sprint eCommerce. But, like UUNET, Sprint sees its role as a network and infrastructure provider for ASPs that want to collocate servers at a Sprint data center.

The idea for these and other players is to host and manage applications and sell access to them to users. The concept is hardly new - it was tried without success in the early '90s by the likes of AT&T, Novell and MCI. But recent services focusing on areas such as e-commerce Web sites and e-mail have met with more success, fueling the current buzz.

This is only the beginning, says Daniel Briere, president of TeleChoice, a Boston consulting firm. Whereas the focus today is on high-end applications like those from SAP that are tough to deploy and require a lot of support, Briere says it won't be long before ASPs will offer standard applications such as Microsoft Office.

It has yet to be proven that users will save money by choosing an ASP instead of buying and deploying applications themselves. Some initial prices look high, with USinternetworking's prices ranging from $10,000 to $200,000 per month depending on the application and number of users.

But by signing on with an ASP, Briere says users get a level of support that many can't offer in-house, such as 24-7 management and monitoring, along with stronger security.