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An ASP For All Seasons

Here's a guide for companies looking for the right service provider for the right application.

Since "ASP" first became a staple of the IT vocabulary in 1999, the term has been used by a number of software vendors and service providers looking to identify their companies with the next big thing in outsourcing. While many application service providers tried to take the short road to success by signing up dot-com clients who were in need of an outsourced application infrastructure, many of these startups failed, dragging several ASPs down with them.

The demand for application hosting services is still strong, however. For companies that continue to outsource the hosting of their applications, it's become a question of choosing the right service provider for the right application. This distinction can be further segmented by vertical industry.

The following is a segmentation of service providers that host applications, divided along the following lines: third-party hosts for independent software vendor applications, third-party service providers, independent software vendors that host their own applications, and industry-specific software vendors that host their own applications.

Third-Party Hosts For Independent Software Vendor Applications
This is the largest category of application service providers, with some of the most recognizable vendors. Third-party ASPs essentially let customers pay a monthly fee for Web-based access to applications, including enterprise resource planning and customer-relationship management, from well-known providers such as Oracle, PeopleSoft, SAP, and Siebel Systems. Examples include Agilera, Corio, EYT, Qwest Cyber.Solutions, Surebridge, and USinternetworking.

Third-Party Service Providers
Companies that have offered their clients the ability to outsource everything from help desks and call centers to entire IT operations are increasingly adding applications to the mix. Service providers such as Computer Science, EDS, and IBM Global Services have years of experience and provide clients with confidence that they'll be in business for the long term.

Independent Software Vendors That Host Their Own Applications
Whether these companies offer hosting as an option for using their software or have chosen to use the Web as the only channel for their products, application outsourcing is not their primary business. But they know their products as well, if not better, than any third party. Examples range from large enterprise independent software vendors such as Oracle, PeopleSoft, and SAP to niche software makers such as eDeploy,, and Salesnet.

Industry-Specific Software Vendors That Host Their Own Applications
Specialized software for specific industries is also available through a hosted model. This provides clients with access to applications tailored to their industry's needs without the need for large upfront investments in IT. Examples include AristaSoft for the high-tech equipment manufacturing industry, Portera Systems for the professional services industry, and Trizetto Group for the health-care industry.

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