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xSPs -- Supporting Service Providers For ASPs

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The ASP industry has spawned numerous provider types, known as xSPs, which specialize in one or more services that ASPs originally performed themselves. This who’s who of xSPs by John Harney defines them, and explains exactly how they support ASPs and each other.
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The ASP ecosystem is comprised of many more virtual service providers than ASPs. In the natural process of differentiation, the ASP industry has spawned numerous provider types, known as xSPs, which specialize in one or more services that ASPs originally performed themselves. In general, when developing infrastructure and capabilities such as data center, network, storage, or wireless, it's now easier for ASPs to lease them from xSPs than to build them themselves. This is true also because the different technologies that ASPs require are changing so fast that ASPs feel challenged to keep up with them as well as service their customers. Also, the ASP model is based on reducing the kind of fixed costs associated with installed solutions. One of the biggest expenses is permanent staff. In leasing from xSPs, ASPs are relieved of the need to retain personnel such as storage or security experts.

Most readers will be somewhat familiar with many of these providers because they've been written about in the press for some time now. But it's doubtful that the readers have encountered all xSPs in the same place with an explanation of how they interact and uniquely support ASPs. This discussion should serve as a tutorial on xSPs so that potential ASP customers can address issues such as why they might desire their ASP to be supported by a particular type of xSP. After all, scenarios exist that justify the involvement of all xSPs, though rarely for the same ASP. So stipulate use of only those that best meet your requirements.

Infrastructure Service Providers

Infrastructure service providers offer services such as access to and management of broadband wide area networks they own or lease, data center space, data backup, servers, and various types of storage.

An ASP leasesthese capabilities from infrastructure service providers to get into business fast, avoid huge up-front infrastructure costs, and exploit efficiencies and economies of scale possible to companies specializing only in infrastructure provision—not also hosted applications or other services. These xSPs offer similar services for multiple ASPs, becoming in essence the default backend for those ASPs' hosted applications.

Infrastructure service providers can also negotiate different types of deals for their outsourced resources with ASPs. They can lease only network connections and secure data center space, whereas the ASP furnishes the space with its own servers and manages the applications running on them. Or they can manage servers they own and lease to the ASP.

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