ASPs aim to change stripes

These days, technology vendors are not above drastic measures to restore corporate health and prosperity. Napster, for example, is piloting a paid subscription model in an effort to gain back the users it lost when lawsuits paralyzed its free song-swapping service.

On the enterprise side, Jamcracker, eConvergent and Partnerware this week are debuting software and services that signify new directions for the respective companies.

Instead of delivering third-party application service provider (ASP) software, Jamcracker now will sell its integration platform to businesses for internal use. The company will roll out Jamcracker Enterprise 3, which is designed for large companies that want to link internal and external Web-based applications and content, says Todd Johnson, a Jamcracker senior vice president. The latest version of the XML-based platform includes enhanced security and directory synchronization capabilities, as well as portal features from Epicentric.

When Jamcracker launched in 2000, the firm billed itself as an ASP aggregator. It did not host applications itself, but instead acted as the conduit through which midsize companies could receive a variety of hosted applications from ASPs and other Web-based software providers.

With the ASP market failing to grow as quickly as expected, Jamcracker executives opted to change their strategy and instead use the technology they've created to help customers handle their growing application integration requirements.

Similarly, eConvergent's expertise in integrating different applications was a factor in its conversion from service provider to software developer. Previously, eConvergent integrated and hosted customer relationship management (CRM) applications from third-party vendors including E.piphany and Kana; this week the company is releasing software for customer data integration.

Meanwhile, Partnerware is trading in its hosted channel management offering for a combination of packaged software and professional services.

For Partnerware, the decision to move from being an ASP to an enterprise software vendor came from the top. Former Tivoli Systems and IBM executive Donna Troy took over as CEO last March and initiated an overhaul of the company's management team and its product line.

The ASP offering wasn't strong enough for large companies, Troy says. With Partnerware TCX Insight, the company's rebuilt Java-based product, a customer can deploy the modules it needs to manage relationships with its indirect sales channel, including resellers, distributors and retailers. Coupled with Partnerware's TCX Foresight professional services, the channel management software can be custom-configured and integrated with a firm's CRM and enterprise resource planning (ERP) applications.

Familiar territory

Jamcracker, eConvergent and Partnerware are not alone in redefining their business models, especially among ASPs battling to stay in business.

Jessica Goepfert, an analyst at IDC, says many ASPs are reshaping and fine-tuning their strategies. Corio and USinternetworking recently announced plans to offer their application management expertise in corporate data centers.

Analysts say the modifications make sense, particularly for Jamcracker. "With the slow end-user adoption of even one ASP service, the demand for an aggregator to pull together multiple ASP services has been pushed out even further," Goepfert says.

Last May, TeleComputing, one of the first ASPs when it launched in Norway in 1997, decided to alter its U.S.-based service to focus on service providers. So in the U.S. instead of delivering hosted Microsoft-based applications to corporations, as it still does in Europe, TeleComputing is licensing its automated provisioning technology, called TECOS, to service providers that want to augment revenue with ASP services.

Interliant is another ASP that changed focus last year, trimming its offerings in response to the difficult economic conditions. Interliant CEO Herb Hribar blamed the slow adoption of the ASP model as he announced plans to stop offering high-end applications such as ERP, CRM and e-commerce. Interliant now focuses on areas where it had seen greater demand: managed messaging (including Lotus Domino and Microsoft Exchange), managed hosting, Web hosting, managed security services and professional services. n