To Asp Or Not To Asp?

Software Magazine,  April, 2000  by David S. Linthicum

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That is the question, as companies weigh the value of building and maintaining their own enterprise applications vs. hiring an application service provider.

IN THE EARLY DAYS OF COMPUTING, most mid- or small-sized companies could not afford a mainframe or minicomputer, and purchased enterprise computing power through time-share services. These services provided a dial-in connection through a dumb terminal (rememberVTl00s), allowing the subscriber to build and use enterprise applications existing hundreds, if not thousands, of miles away.

The value proposition of time-share services was the simple fact that businesses with limited funds did not have to purchase, maintain, and hire a technical staff to run their enterprise-critical applications. Instead, they paid a per-use fee, allowing them to direct capital to other more profitable areas.

Fast-forward a few years. As computing cost continued downward, those same organizations that once leveraged time-share computing were finally able to purchase their own enterprise systems and build and maintain their own applications. The rest is recent history.

However, as the price of technical talent continues to rise sharply and Internet-delivered applications become more commonplace, companies are reevaluating the business case for developing and maintaining enterprise applications within the corporate firewalls. Enter the concept of an application service provider (ASP), an organization that delivers application services over the Web, typically at a reduced cost compared to maintaining the systems yourself.

Wall Street Darlings

ASPs are the darlings of Wall Street, with over a billion dollars in venture and corporate capital sunk into this concept. New ASPs, including USinternetworking, are looking to deliver all types of applications using the ASP model. These companies offer core enterprise applications, such as ERP (e.g., SAP, PeopleSoft, Baan, Vantive, etc.), down to the run-of-the-mill office applications such as scheduling systems and even word processors.

In addition to ASP start-ups, traditional network companies and ISPs are looking to get into the mix. For instance, AT&T just launched a new campaign looking to attack the emerging ASP market. J.D. Edwards & Co. has unveiled its strategy to provide a hosted version of its software, known as Jde.sourcing. And Siebel Systems is taking a similar approach, using Applicast, an ASP start-up. to deliver their sales automation application.

The integrators are in the game as well. Andersen Consulting and Exodus Communications are teaming to provide ASP and e-commerce services. Moreover, Qwest and KPMG have formed an ASP joint venture to address business-to-business e-commerce.

Finally, Microsoft is working on Microsoft Office Online, and has pilot projects at Micron, Concentric Network, Verio, Digex, Equant, Qwest, USinternetworking, and Winstar. Microsoft is hoping to be the first ISV to extend the ASP model from enterprise applications to office automation. However, yahoo.com and excite.com already provide some rudimentary hosted office automation applications, including e-mail and shared scheduling.

ASP Architecture

The architecture employed by ASPs is nothing more than a hosted Web-enabled application, like ones that are running on many sites today. ASPs typically run Web-enabled versions of applications from application vendors, such as SAP, Vantive, Siebel, PeopleSoft, etc. They may also employ some security software to validate users, perhaps virtual private network software, to ensure that others do not see sensitive data on the Internet.

Although each ASP approaches application hosting a bit differently, generally speaking they employ a four-tier Web-enabled solution consisting of a data layer, application layer, Web server layer, and user interface layer or browser, (see "The Four-Tier Solution," this page). The data layer stores all relevant information for the hosted applications, typically in a relational database. The application layer provides the location for most of the application logic (an application server). The Web server layer ensures that the application (business logic and data) is delivered to the user interface layer using standard Web protocols such as HTTP, HTML, or perhaps Java.

To host so many applications and serve thousands of users, ASPs must maintain data centers. Like traditional mainframe and minicomputer data centers, ASPs need to support a cluster of servers, running a variety of applications, all connected to the Internet through a large pipe, usually a bundle of T-3s. While some ASPs provide only one centrally located data center, many ASPs are hosting applications at many locations around the world, so that the application users can connect to the application servers over a short distance. In addition, they must provide 7x24 support, and they must provide redundant systems so that mission-critical applications can never go down. Infrastructure is key when selecting an ASP.