ASPs build momentum

By Daniel Briere and Christine Heckart
Network World, 05/24/99

Like the ISP movement of the early 1990s, the applications service provider (ASP) movement could be huge. Network-hosted applications could completely change the way we buy, sell, live and interact with businesses and people. The question is: How will it impact you and when?

Last week's announcements at NetWorld+Interop 99 underscored the momentum behind this movement.

For example, Sprint announced plans to deliver basic as well as sophisticated applications over its Integrated On-Demand Network. US WEST announced it would distribute USinternetworking's ASP services throughout its 14-state territory;and 25 vendors and service providers - including AT&T, Cisco, Sun and MCI WorldCom's UUNET - established the ASP Industry Consortium. The ASP Industry Consortium will develop common ASP definitions, sponsor research and educate users and vendors.

In addition, the learningstation.com demonstrated a high-performance application service focused on the educational market. The service, which offers basic applications such as Microsoft Word and Excel, will be offered at low prices, too - starting at $169 per desktop for a year. Compare that with the cost of putting Microsoft software on every employee's desktop!

Then US WEST announced plans to ship Alcatel screenphones to Internet customers. In talking with US WEST's marketing crew, this is just the beginning of what they think will be a huge market for Internet appliances.

The ASPmarket is not just a high-bandwidth ploy (although with US WEST's new $29.99 price for digital subscriber line, it's hard to imagine why it won't be just high bandwidth soon). It is also for narrowband and dial-up modem services.

Soon you'll be keeping grocery lists on the Internet through screenphones, so you can input them at home but download them at work before you go to the grocery store.

Qwest continues to be two steps ahead in this arena. The company is one of the few players today that can pitch full end-to-end control over applications because of its local access deals with Covad and Rhythms NetConnections.

That means the company can offer full quality of service and service-level agreements. That's significant because reliability and availability will be key differentiators in the ASP arena.

Everyone needs to remember that this is a young market. Let's not kill it by setting unrealistic expectations. We do not recommend that you go with suppliers who do not meet reliability, availability and security thresholds. But let's be reasonable, particularly as we talk about remote offices, telecommuters and small and mid-size businesses - the true mainstream for applications.

Judge for yourself but weigh the evidence in light of the number of users, applications, relative costs and opportunity to free MIS up from some tactical firefighting to focus on solving strategic business problems.