Web-hosting company NaviSite Inc. is moving into theapplications services provider market. NaviSite said yesterday that it will license, manage, and monitor Oracle applications for customers who want to outsource those systems to a third-party provider.

NaviSite says customers can rent the Oracle 8i licenses and applications from the company, which will enable NaviSite to provide a cheaper solution to its customers who might otherwise buy the license themselves. Oracle will still market and sell the ASP service, and NaviSite will manage and host the software.

NaviSite recently began construction on data centers in Andover, Mass., and San Jose, Calif., to help handle the ASP effort. The centers will be equipped with "Cisco Powered" networks, and redundant electrical, air conditioning, and fiber-optic Internet connectivity infrastructures. The San Jose site, which is expected to be completed in November, will be a 67,000-square-foot facility with 25,000 square feet of raised floor.

However, analysts suggest NaviSite might be better off providing the infrastructure for hosted applications, rather than hosting them and managing them itself. Analysts point to Qwest Communications Inc., which is providing the network and server-farm infrastructure to support Oracle's hosted applications. Oracle sells, manages, supports, and configures the applications for customers. "If NaviSite pursued a deal similar to this one, they would be leveraging their infrastructure and would better benefit the customer in this capacity," says Tom Kucharvy of Summit Strategies.

Pricing was not yet set.