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Essential Guide to Application Service Providers, The

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Essential Guide to Application Service Providers, The


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  • Copyright 2002
  • Dimensions: K
  • Pages: 432
  • Edition: 1st
  • Book
  • ISBN-10: 0-13-019198-1
  • ISBN-13: 978-0-13-019198-4

  • The complete guide to defining-and using-the right ASP solutions
  • How to manage the risks and opportunities of ASP relationships
  • How to ensure performance, security, and reliability in ASP-supported applications

The practical guide to ASPs: strategies, tactics, implementation, and management.

Using Application Service Providers (ASPs) can save companies money, expedite the deployment of new enterprise applications, and enable the re-allocation of scarce resources to strategic business opportunities. Here's a complete guide to ASPs for every business decision-maker. In concise, easy-to-understand language, Jon William Toigo presents the business case for using ASP services, identifies the pitfalls and how to avoid them, explains the technologies supporting the services, and offers practical guidance on leveraging ASPs for maximum competitive advantage. The book answers important questions, including:

  • How does ASP "out tasking" fit with familiar outsourcing and time-sharing approaches?
  • Who are the leading ASPs, and what differentiates one vendor from another?
  • What applications ASPs do offer: from desktop to enterprise, payroll to storage?
  • How do ASPs deliver the goods using multi-tier client/server and Web technology?
  • How can ASPs drive down the cost of owning and managing e-business infrastructure?
  • How can ASPs facilitate supply chain management and business process management?
  • What really needs to be considered when evaluating the ASP option?
  • How can requirements be identified and specified to ensure that an ASP meets them?
  • How can ASP performance be measured?
  • What steps can be taken to safeguard key business processes from an ASP failure?

Drawing on real-world examples, this book offers a complete, step-by-step methodology for determining how and when to use ASPs, choosing the right provider, negotiating the best contract, deploying service efficiently, and managing ASP relationships for long-term success.

"Refreshingly honest and pragmatic about the ASPmodel, Jon Toigo's book gets to the essence of howcompanies can make the right decisions regarding theirASP direction."

—Louis Columbus, Senior Analyst, AMR Research

Sample Content

Online Sample Chapter

Setting the Stage for ASPs

Table of Contents

Preface and Acknowledgments: The Emerging ASP.

Foreword by Christopher R. McCleary.


1. Setting The Stage.

Information Technology As A Service. Service Provisioning. The Storage Layer. The Server Layer. The Network Layer. The Application Layer. The Management Layer. Conclusion.

2. What is an Application Service Provider?

Asp: Definition Or Description. A Survey Approach. Business Value Proposition Of An ASP: Cost Reduction, Risk Reduction, And New Capabilities For Business. The Bottom Line.

3. How Does an ASP Differ from Traditional Computing Models?

Evolution In Business Information Systems. Toward PostÐClient-Server Computing. Server Recentralization. Application Recentralization and Thin Client Computing. Web Technology: The Internet, Intranets, And Extranets. The Past Is Prologue: Software Delivery Via Web Technology. Conclusion.

4. ASP Arrangements and Traditional Outsourcing.

Different Kinds Of Outsourcing. In Situ Outsourcing. Out-Tasking. Beyond Market-Speak: Asps And Outsourcing. Lessons From Outsourcing. Customization And Asps. Application Service Delivery: The Network Is The Key. Conclusion.

5. The Contemporary ASP Market: Vendors, Intermediaries, and Aggregators.

Infrastructure Services Layer. Application Services Layer. Integration Services Layers. Analytical Services Layer. Conclusion.

6. So, What is Holding Up the ASP Revolution?

Outsourcing And The Economy. Customer Inertia. Building An Empirical Case. Technical Hurdles. Performance Measurement Gap. Security. Standards And Best Practices. The Right Applications. Conclusion.


7. Basic Concepts: Application Software.

What Is Application Software? Application Design And Performance. Conclusion.

8. Basic Concepts: The Role of Middleware.

Determinants Of Application Performance Move Outside The Box. Middleware. Flavors Of Middleware. Rpc. Mom. Orb. Tp Monitors. Back To The Future.

9. Basic Concepts: The Application Server.

From Application Software To Application Server. The Rise Of Application Servers. Out Of The Box Web-Enabled Software On The Rise. Application Server Market Growing. Application Servers For Single User Applications. Citrix Systems. New Moon Systems. Tarantella. On To Frameworks. ORACLE iAS.

10. Basic Concepts: Web Technology.

Onto The Web. Context For Web Technology. How It Works. Security: A Mission-Critical Component Of Web Technology. Expanding Interactivity. Conclusion.

11. Putting It All Together: The Hosting Environment.

The Application Hosting Environment. The Basic Application Hosting Infrastructure. Adding High-availability Features. From High-Availability To Performance And Scalability. Securing The Infrastructure. Security 101. Layers Of Security. Physical And Logical Design. Conclusion.

12. Networked Services.

Delivering Services Across A Network. Private And Public Networks. What Is A Private Network? Onto The Ring. Last Mile Issues. Virtual Private Networks And Proxies. Spawning Yet Another “Sp”.


13. Building an ASP Solution.

Overview Of The Asp Review Process. Preliminary Steps. The Requirements And Objective Setting Process. Setting Objectives. Where To Find Information About Asps. Use Of Consultants. Isv Notes. Conclusion.

14. Setting ASP Selection Criteria.

The Rfp Process. The Requirements Specification. Introduction and Identification of Goals. Detailed Specifications Section. Time Line for Implementation. Vendor Response Q&A. Risks. The Business Information Section. RFP Response Instructions. Financial Information Request and Bid Price. Rfp Response Review And Vendor Selection. Conclusion.

15. ASP SLAs and Contracts.

Contracting For Service. To The Service Level Agreement. Application Deployment Tasks. Application Service Monitoring Tasks. Customer Service/Operations Tasks. Frequencies, Weighting, And Other Matters. Conclusion.

16. Managing the ASP Relationship.

Vigilant Oversight. Beyond Application Measurement. Conclusion.

Afterword by Traver GruenÐKennedy.



Early one September morning in 1999, a Compaq Computer Corporation executive shuffled his notes, tested his lavolier microphone, and made other last-minute preparations to deliver a keynote address at the iForum Conference in Orlando, Florida. Individually and in small groups, attendees--still bleary-eyed and with first-of-the-day coffees in hand--filed quietly into the cavernous, dimly lit meeting room at the Walt Disney World Dolphin Resort. In near-complete silence, they found places among the neatly arranged rows of chairs, seated themselves, and stared blankly at the stage.

Oddly, the scene conjured to mind a would-be George Romero horror movie sequel--Morning of the Living Dead--in which zombies act out some sort of imprinted behavior without any real cognition or motive. Indeed, many attendees seemed to be using the session as a means to an end: as a justification for partaking in the delicious breakfast supplied by the host, an opportunity to plan their tee-times for golfing later in the day, or just a temporary respite from the uncomfortably bright Floridian morning sun. Few seemed to be attending the speech to actually hear the speaker's words.

The speaker watched, poker-faced, as the room filled with bodies. Most presenters would agree that the first-session-of-the-day is rivaled only by the first-session-after-lunch as the worst time to be scheduled to speak. Engaging the audience in the substance of the presentation is a greater challenge at those times owing to their characteristic grogginess. It requires that the speaker present his or her information with a greater degree of energy and originality than would be required at other times of the day.

On this occasion, the Compaq executive's demeanor was one of utter calm--implying either the cool confidence of a well-rehearsed speaker or the false confidence of a complete novice. An exciting, shocking, or humorous opening would decide the issue.

Instead, the speaker referred to his script and opened his talk rather predictably--first, paying homage to the host, Citrix Systems, then extolling the merits of the Citrix approach to server-centric computing. Equally predictable was his assertion that his company's own server systems provided the optimal host platform for centralized application delivery. To support his claim, he asked that a digitized video of customer testimonials be played on the big screen behind him.

He stood to one side, preparing to bask in the pixelated glow and recorded praise of his customers. Without warning, the software-controlled playback abended in midkudo. A few awkward moments elapsed while technicians tried unsuccessfully to restart the hosted video clip.

The unplanned turn of events was perhaps the salvation of the presentation in disguise. The speaker forgot about his notes, journeyed away from the podium, and sauntered out to stage center. There, he began to deliver a more extemporaneous version of his talk.

Perhaps as much to jolt the crowd to a higher degree of alertness as to cover for the presentation faux pas, his pitch shifted from the even marketing drone of a corporate mouthpiece to a much louder "shoot-from-the-hip" sort of rant. He opened with a blunt statement: Application Service Provisioning (ASP) is about to change the fundamental dynamics of the business computing world in a way that has not been seen since the emergence of the Internet. He then proceeded to reiterate the key components of the ASP value proposition--a mantra chanted by virtually every speaker at the conference (and at the numerous ASP conferences that have occurred since then):

  • With the ASP model, software is operated on an ASP's server computer, while the application user interface is delivered to the subscriber's client device--whether a desktop PC, thin computer, network computer, wireless device, or other client--using a secure private network or public Internet connection. This model for application delivery eliminates the need for end users to purchase software and install it locally on their own PCs and servers. It prevents users from becoming enmeshed in the endless and costly downward spiral of patches and upgrades that have served software vendors like annuity programs.
  • The ASP model moves the burden and expense for administering desktop software to a qualified service provider, the ASP itself, enabling IT resources to be reallocated to other meaningful tasks.
  • ASPs enable medium and smaller companies to utilize "enterprise class" applications such as Enterprise Resource Planning (ERP), Materials Resource Planning (MRP), and Customer Relationship Management (CRM) without incurring the expense and difficulty for application rollout that tends to make these applications the exclusive domain of the wealthiest and largest companies alone. In short, ASPs "level the playing field" between rich and poor, big and small.
  • ASPs provide access to applications that are infrequently used and/or difficult to cost-justify for outright purchase. Why should companies buy software, if they are better served by using it on a "pay per drink" basis?
  • ASPs provide an offset to the growing problem of limited IT staff resources. Instead of underwriting costly IT training programs or incurring the expense of locating and hiring increasingly scarce programmers, systems administrators, and network administrators, why not outsource the applications to a provider who already possessed these resources?

The best thing about ASPs, according to the speaker, was that the technologies that enable this model for application delivery were not experimental. Products such as Citrix Systems's MetaFrame were pedigreed and ready for use, enabling applications to be hosted on a centralized Windows NT or 2000-based server. Moreover, the Citrix ICA protocol enabled the user interface of a hosted application to be extended across low speed/low bandwidth networks. Thus, even the public Internet could provide a vehicle for ASP.

Quod erat demonstrandum. ASPs, he concluded, are poised to dominate the future of software distribution.

Without skipping a beat, the speaker shifted his tone from that of a visionary to that of an inquisitor. He asked rhetorical questions that mirrored an issue on the minds of many conference attendees: Why, given the inherent benefits of the ASP model for users and providers alike, was the ASP revolution not occurring more quickly?

Who was to blame for the hesitation of companies to subscribe to the offerings of a burgeoning ASP industry? What counter-revolutionary forces were at work?

He slowly turned to a section of the room where the representatives of the trade press were seated. Slowly and dramatically, he raised his hand and pointed an accusing finger.

"Despite what some malcontents in the trade press say," he grumbled, "the Application Service Provider model isn't just time-sharing* by a different name."

The ASP, he said, was an entirely new method of application delivery that stood on the threshold of revolutionizing the software industry. Only a few pessimistic pundits and naysayers stood in the way of the emergence of the ASP and all of the tremendous benefits that it would impart.

The assertion was rewarded by the enthusiastic applause of the audience, many of whom muttered grumbling agreement that they had seen many reports about ASPs--but few that actually endorsed the approach.

Although ASP-related events, such as the formation of ASP joint ventures by leading software, networking, and consulting companies, have been duly noted and reported, few publications have carried feature articles that might be viewed as "ASP positive." As with many other (but not all) technologies, the press has adopted a critical and cautious view of the ASP phenonmenon. Was the press shaping the popular view of ASPs, or merely reflecting it back to the vendors?

Many commentators and analysts have observed that, though the number of self-styled ASPs has been growing at a rate of more than 200 per month, the number of customers for these services has not proceeded apace with the growth of the vendor community.

Some have attributed this gap to conservatism on the part of prospective customers: unwillingness to trust third parties with important or critical information processing functions, concerns about the security of networked application delivery, or reluctance to deviate from established practices. Others have pointed to the lack of publicized industry standards and practices, and the absence of service level agreements (and of the means to monitor vendor compliance with them) as key impediments to the ASP revolution. Still others have noted that the ASP is a new concept and requires substantial consumer education before it can attain widespread industry acceptance.

Despite these challenges, leading industry analysts, including DataQuest, International Data Corporation, the Yankee Group and others, have released projections depicting the future of the ASP approach in bold lines that sweep high and to the right. Collectively, they hold that a compelling case is building, both for consumers and vendors, for application and infrastructure outsourcing. ASPs, they claim, will come to profit on these trends.



his book is about the evolving ASP phenomenon. It seeks to answer fundamental questions about ASPs: the who, what, where, when, and how of an emerging architecture that has seen substantial investment activity among recognized vendors of systems, network, and application technology.

It should be noted that the term "ASP" is not rigorously defined in this book. Strange as it may sound, establishing a hard definition of the term would likely create a point of contention rather than contributing meaningfully to the clarification of the term. Indeed, in performing the research comprising this book, it was common to find ASP spokespersons using some rarified (and usually self-serving) definition of an ASP as a "discriminator," that is, as a means for comparing one's service offering favorably to that of a competitor.

Some vendors added adjectives such as "pure play" and "self-sufficient" to the term ASP to suggest that a hierarchy existed among ASPs and that the inherent superiority or inferiority of any service could be discerned by reference to this hierarchy. Rightly or wrongly, some vendors emphasized their ownership of the application they were provisioning to minimize the offerings of vendors, who, themselves, leased applications from another company. Others suggested that their knowledge of complex systems integration and implementation placed them ahead of the pack of software vendors-turned-ASPs. Still others emphasized their expertise or ownership of system or network resources as a means to distance themselves from less competent or less well equipped competitors.

Considering the current shortfalls in customer subscriptions confronting virtually all ASPs, many interviews brought to mind the wisdom of Henry Kissinger's assertion that "the reason interdepartmental battles are so bloody is that the stakes are so small."

Suffice it to say that the term "ASP"--like the terms "integration," "e-business," and "middleware"--embodies more "marketectural" than architectural content. Marketecture is what happens when technology is "productized" by the sales and marketing and press relations organizations within the high tech industry.

The result of marketecture is that there are about as many definitions of ASP as there are vendors. Rather than defining the acronym, this book surveys the meanings attributed to ASP by analysts and practitioners and leaves to the readers the task of deciding which definition best meets their needs.

The origin of the term ASP is itself a sticky point. One analyst claims to have originated the term as a handy way to refer to a subset of a larger trend toward infrastructure outsourcing using web Technology. Her definition of the ASP acronym is Application Service Provisioning. By contrast, another prominent figure in the ASP world claims to have originated Application Service Provider (also abbreviated ASP) as a means to identify a cadre of companies that were offering rented applications via private networks or the public Internet. The use of ASP in this book encompasses both interpretations but will generally refer to the provider, rather than the process.


This is not to suggest that ASP is a wholly relativistic concept. Although there are a number of self-proclaimed ASPs in the market today that are little more than traditional outsourcing companies, or Web site hosting companies trying to capitalize on the current interest in ASPs by recasting themselves as application service providers, there are some characteristics that establish ASPs as a breed apart. These characteristics are covered in the first of three sections that comprise this book.

The first section comprises several chapters that cover ASP fundamentals. An optional first chapter, aimed at the nontechnical reader, sets the stage for the discussion by explaining a number of technical terms and by introducing a conceptual framework for understanding application delivery service. Both experienced and novice business technology planners can use this chapter to orient themselves to the material that is presented later.

In Chapter 2, the reader will be introduced to the many definitions attributed to the deceptively straightforward moniker, ASP. The basic components of an ASP will be identified, as will the central themes that constitute the business value proposition of the ASP. Application service provisioning is also discussed against the broader backdrop of infrastructure outsourcing using Web technology.

Chapter 3 continues this discussion by contrasting Application Service Provisioning with conventional corporate computing models that are currently used by most organizations. This chapter demonstrates how the ASP phenomenon is less a sudden and disruptive departure from the normal modes of corporate computing than a natural evolution of computing--a predictable outcome of corporate computing trends and directions, given their inherent costs and challenges.

Chapter 4 takes on the issue of whether ASPs can properly be termed another form of outsourcing. A brief historical tour will be offered of the traditional outsourcing approaches of the early 1980s. Deservedly or not, the outsourcing experience of that era left a set of negative impressions and attitudes in its wake which have come back to haunt the advocates of the ASP approach. These attitudes need to be reckoned with, both from the standpoint of their applicability to present ASP initiatives and for what they can teach about requirements for effective ASP service contracts in the future.

Chapter 5 provides an overview of the types of companies that are providing ASP services today:

  • from Internet service providers and Web hosting companies who are seeking new business lines and revenue streams by fielding application service offerings
  • to traditional outsourcing companies who are retooling service offerings to capitalize on the ASP craze
  • to software companies looking for new distribution models and improved market share
  • to more complicated alliances of network providers, integration consulting firms, and others who are endeavoring to make networks or data centers more profitable or to set the stage for future client work

Part of the confusion about the meaning of the term ASP derives from the mixture of objectives and approaches brought to bear by the very different entities offering ASP services. Trying to make sense of it all is the ASP Industry Consortium, a group of service providers interested in promoting the adoption of ASPs by business worldwide.

Chapter 6 concludes the Fundamentals section with an examination of the issues that must be addressed for the ASP model to achieve widespread use within the contemporary business setting. It sets the stage for a discussion of the current technical capabilities of, and the obstacles confronting, ASPs (the substance of Part Two of the book) and also examines the strengths and deficits in the management and practices of ASPs and their business models (Part Three) that are only today, as the hype around ASPs has begun to dissipate, beginning to receive serious attention from vendors.

Part Two covers the enabling technologies for ASPs. Chapter 7 begins with an examination of application software itself. An overview is provided of the languages and architectures that are commonly used to create modern software applications in order to describe how structures increasingly favor "Web technology-based" software delivery.

Chapter 8 introduces readers to the concept of "middleware" and its use in interconnecting distributed application components, which may be hosted on numerous levels or "tiers" of computer server platforms.

Chapter 9 tackles the often confusing and mysterious topic of application servers: software that integrates applications (and middleware services) that were not themselves designed for Web-based hosting, thereby enabling applications for distribution as an ASP service.

Chapter 10 explains what the airy term "Web technology" means in detail. There is a popular misconception that delivering application services via Web technology means that applications are themselves distributed via the public Internet and World Wide Web. This is not generally the case with most ASPs. Rather, Web technology is used with private networks to create "intranets" (or extranets) which facilitate the use of applications using common Web browsers as clients.

Chapters 11 and 12 move the discussion from software to hardware and networks. In Chapter 11, the hosting platform, the multitiered server platforms and storage infrastructure used by ASPs to host applications, is examined in considerable detail. The chapter covers basic hosting platform design, then identifies architectural enhancements that can improve the availability, performance and security of platforms.

Chapter 12 addresses the network provisioning requirements for successful ASP-hosted application delivery. Most ASPs do not provision their own networks, but utilize transmission and access facilities provided by public carriers or third-party service providers. The fact is that the further a company is from a metropolitan area that is well served by high bandwidth networks, such as fiber optic network rings, the more difficult it may be to derive the greatest value from current hosting models. The current state of the network is discussed in this chapter.

Having discussed the ASP value proposition, the current generation of ASPs themselves, and the underlying technologies that enable the delivery of software as a service, the final section this book covers ASP implementation. Chapter 13 begins this discussion by setting forth an approach for business planners who are interested in determining whether the ASP approach is right for their companies. Specific steps for acquiring an ASP solution may differ from company to company, but most approaches will entail the tasks described in the model introduced in this chapter and articulated in the remaining chapters of the book.

Chapter 13 provides an overview of the initial steps, including the formulation of objectives and the creation of an "in-house" application deployment alternative that can be used in comparing ASP solutions and setting criteria for their selection. The chapter also provides references to a number of information sources that the reader can consult to identify prospective candidates to deliver ASP services for the company.

Chapter 14 continues the process of ASP evaluation and selection by providing an overview of the structure of a request for proposal (RFP) that can be submitted to ASP vendors in order to solicit bids for the company's business. The chapter describes an RFP-based screening process that is increasingly used by companies to identify best-of-breed providers, winnowing the field of candidates to one or two that can be visited by the company planning team and evaluated per documented evaluative criteria.

Chapter 15 tackles the subject of ASP contracts and service level agreements. In the absence of generally agreed-upon industry standards and practices, a commonsense approach--drawing in part from other types of outsourcing agreements--is offered for structuring formal relationships with ASPs. The intent is to create a relationship that both meets customer expectations and facilitates ongoing cooperation between both vendor and consumer in the face of constant business and technological change: no easy task!

Chapter 16 concludes the book with guidance about the requirements for managing the ASP relationship over the long haul. The human factor--referring to the intelligent and thoughtful invocation of contractual remedies for ASP service problems--is just as important to determining the success or failure of an ASP solution as any technical component of the solution itself. The chapter examines successful and failed arrangements to derive a better understanding of the necessary ingredients of an ASP implementation that meets company needs.


The ASP, like all technology innovations, mixes old and new technologies. The author hopes that, having read this book, readers will be empowered with a clearer understanding of the capabilities and the limitations of ASPs so that they can better evaluate the suitability of the strategy against the backdrop of their own business requirements.

As a companion to this book, the author has also created a Web site at www.eguideasp.org that will serve as a respository for vendor neutral information about ASPs and a clearinghouse for information received after the publication of the book. Readers are encouraged to use the site and to suggest to the author any changes or additions that would make this book more useful in subsequent editions.


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