cost savings, enhanced levels of service, and improved convenience. However, it will be
the return on investment that customers receive from these services, whether measured
by cost savings, revenue generation, or some other added value, that will determine the
success of the approach.
When exploring the options of using an xSP, potential customers should weigh the
advantages of saving time, lowering capital expenses, and making better use of personnel
resources against the potential challenges, such as legacy integration, xSP financial viability,
and complexity of service level agreements and contingency plans.
H o w A S P Te c h n o l o g i e s Wo r k
Technological Factors Influencing ASPs
The technologies and advances that have stimulated the growth in popularity of the
ASP model include but are not limited to:
- Internet ubiquity.The expanding capabilities of the Internet and the ongoing develop-
ment of Web-enabled solutions have enabled the transition from in-house application
management to a hosted solution.
- Increased accessibility and declining cost of bandwidth capacity. Improvements in communi-
cations networks combined with the fall in bandwidth costs have made ASPs viable.
- Internet familiarity.The straightforward and familiar user interface of Internet browsers
has had a direct effect with the increase in popularity of Web-enabled solutions.
- Potential of e-commerce and e-learning applications. Concerns expressed by the
e-commerce and e-learning sectors regarding security and reliability are similar to
those expressed by potential ASP users. As e-commerce and e-learning developments
offer solutions to these challenges the wider acceptance of hosted applications should
- Shared applications in a client/server environment.The similarity between remote access
technologies used by the ASP model and the application delivery model of
client/server architectures with which users are already familiar also helps.
Service Level Agreements
Organisations that choose to use outsourcing of software and services via the Internet
should carefully consider a strategy to protect their data. Service Level Agreements
(SLAs) are written agreements which `seek to define what service the IT department will
provide to users of specific applications or systems.'These are now a standard part of
business practice. Conspectus reported that eighty-two per cent of companies were using
SLAs to define their expectations and contingency plans in the event of a service failure.
It may be difficult to couch these SLAs in sufficiently precise legal terminology. In the
same survey, Conspectus discovered that only forty-six per cent of organisations use
Pat Sweet, "Storage at a price", Conspectus, May 2003, p. 4.
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