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The Application
Service Model
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Since the 1980s, the standard practice for businesses and individuals has been to build
bespoke software or to purchase licences for off-the-shelf software, and to install it on
their own hardware. In large-scale cases, this has been done with the assistance of
specialised IT staff and has involved intensive (and expensive) training of personnel.
Nowadays the outsourcing of IT i.e. the transfer of responsibility over components or
organisational IT infrastructure, staff, processes and applications to an external resource
provider is becoming more and more popular. Some experts believe that this may be
the ultimate model of computing.
4
Outsourcing has three key benefits: experienced staff
are already in place, specialised tools and software are already in place, and no major
investment is required at the outset. IT outsourcing providers can be divided into three
primary categories:
- Application Outsourcing providers typically manage and maintain software applications.
Depending on the actual ownership of the application this sector is sub-divided into
Application Service Provider and Application Maintenance Outsourcing (AMO).The
ASP remotely hosts and delivers software applications to the customers using its own
computer resources.The client `rents' access to the application. Usually this is paid on
a per-user basis for a specific period of time. AMO providers manage a proprietary
software application from either the client's or the provider's site.
- Information Utilities and Business Process Outsourcing providers focus on outsourcing
solutions for business-specific processes such as finance, accounting, or payroll.
- Platform IT Outsourcing providers offer a variety of services, including hardware man-
agement, onsite and offsite support, and data security and recovery.These
relationships typically involve the transfer of IT facilities, staff or hardware.
ASPs can offer services falling under one or more of these categories.While the ideas
behind ASPs are not new, the Internet has made their implementation easier. ASP com-
bines an early computing business concept of timesharing with the new delivery meth-
ods that the Internet can offer.
Application Service Providers
The ASP committee of the Information Technology Association of America
(ITAA) defines an ASP as `any company that delivers and manages applications and com-
puter services to subscribers or clients remotely via the Internet or a private network.'
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In recent years, companies have been set up exclusively as service providers, and estab-
lished software vendors such as Microsoft have launched their own ASP departments or
subsidiaries.These companies offer a wide range of services, including (but not limited
to) e-mail, customer relationship management (CRM),
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human resource management,
virus checking, and financial services.
4
http://www.ameinfo.com/news/Detailed/16721.html. Other experts disagree.Tom Siebel, CEO of Siebel
Systems
, insists that `the hosting business model has no merit'
(http://www.aspstreet.com/archive/d.taf/what,show/l,pv/sid,25/id,18541), although the links between
ASPs and Customer Relationship Management are growing.
5
http://www.itaa.org/asp/presentation/harris.ppt
6
On the application of CRM to the cultural and scientific heritage sector, see DigiCULT Technology Watch
Report 1, 2003, pp. 21-40.
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