ASPs: Masters of the Internet

There is a simple reason why ASPs have been and will remain the most important of all service providers: It is that one word, application.

An application is any kind of functionality, delivered as a computerized process. ASPs are important because their role is to make the Internet functional; they enable businesses to use the Internet to get things done.

For the first few years of their existence, this has been more of a vision than a reality. The available technology has not been up to the task, and ASPs have had to work hard to shape it to their requirements. Some sought to add Internet capability and economy of scale to established, recognized enterprise applications. Others started out with Internet-native, Web-based applications and worked to make them fit for enterprise deployment.

Today, the hard work put in by both sets of pioneers is finally beginning to pay off. A business and technology model is emerging that delivers enterprise-class functionality without the limitations and restrictions of earlier attempts. The next-generation, application-enabled Internet is taking shape, with a new form of ASP at its core – the Master ASP.

A master ASP acts as a kind of wholesaler of application functionality. Partners configure the appropriate functionality for delivery to customers, either tailored to a specific vertical market or customised to an individual client. The partner usually has the option of branding the offering as their own, and sometimes add complementary functions or services. They may also have the option of providing frontline support and customer service elements, such as first-level helpdesk, billing and account management.

Best of Both Worlds

The model offers the economies of scale of a shared infrastructure that delivers functionality on a one-to-many basis, at the same time as retaining the one-to-one tailoring and customization that individual partners can deliver to their specialist or local markets. It is enabled by pairing up the component-based software technology of web services architectures with the multi-tiered partner relationships that have become a commonplace feature of the ASP value chain.

Using a component-based architecture makes it possible to separate out different layers of functionality in an application, and then to delegate the configuration and management of certain layers to partners in the value chain. A previous column cited Microsoft, Lawson Software and Documentum as established enterprise vendors who are already adopting this application engine model (see Engines That Will Drive Software as a Service). The model is equally applicable to Web-native applications.

The most common form of master ASP operating today can be seen in the enterprise ASP sector. One of the earliest examples is eOnline, whose systems integrator partners have complete freedom to configure the business logic of the SAP, Siebel and Ariba applications it offers, while eOnline itself remains firmly in control of the underlying application system architecture. Many of the leading enterprise ASPs are developing similar models.

Mastering Small Business

An example serving of an ASP that serves smaller businesses is Allegrix, which hosts MS Exchange and other applications. It allows partners to configure and provide frontline support for the service while remaining in control of the application infrastructure.

Master ASPs are also emerging among Internet-native service providers. One example is Rivio, which provides a business administration platform for small businesses. Its channel partners are leading brand owners with their own small business customer base, such as Bank of America and BellSouth, as well as smaller regional ISPs. Rivios offering includes integrated third-party services from providers such as Interpay and Microsoft bCentral as well as its own proprietary functionality.

In the future, the evolution of the master ASP model may also give rise to providers who host a portfolio of online functions without packaging them into finished applications. It will be up to partners to assemble the available components into useful business service propositions. But such providers will still need to include a full selection of ASP infrastructure services, such as service level agreement (SLA) monitoring, metering and billing functions. Understanding how to deploy and manage these essential ingredients of ASP infrastructure will remain a vital part of enabling the next-generation functional Internet.

Phil Wainewright founded, an site, and now serves as a consulting analyst. He is based in London and can be contacted at [email protected].