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ASPs: They Do More Than Just Save Money

For years, many large companies have outsourced to contain or maintain costs. But economic conditions are driving businesses to re-evaluate business and IT initiatives in ways that move beyond money in customer-ASP relationships. Half the respondents in a recent <i>InformationWeek</i> Research application service provider survey don't consider cost a significant factor when selecting an application outsourcer.

InformationWeek Staff

November 2, 2001

2 Min Read

For years, many large companies have outsourced to contain or maintain costs. But economic conditions are driving businesses to re-evaluate business and IT initiatives in ways that move beyond money in customer-ASP relationships. Half the respondents in a recent InformationWeek Research application service provider survey don't consider cost a significant factor when selecting an application outsourcer.

What really matters, current and prospective ASP customers told InformationWeek at a forum on evaluating service providers held in New York on Oct. 25, is whether an ASP can become a true partner in the user's business. Such partnering may include customizing or developing applications, helping to maximize return on investment from hosted applications, and improvement of business practices.

Network ownership, an advantage touted by some service providers, wasn't cited as an important factor when choosing an ASP. One reason: It's likely to have minimum backup capability if things go wrong, while an ASP relying on one or more major network providers would have the safety of those providers' multiple infrastructure redundancies.

ASPs are answering the relatively new set of customer-driven objectives by forming alliances with consultancies and business-outsourcing companies, thus simplifying the customer's search for comprehensive solutions.

Is your company looking for more collaboration in its relationship with its ASP? Let us know at the address below.

Peter Weiss
Senior Editor, Events
[email protected]


Joint Effort

How are business conditions changing the way application service providers service and collaborate with their customers? ASPs are playing an active role in providing support for rented or leased applications. And most of the time, they aren't doing it alone.

Of the 75 companies using ASPs that were interviewed by InformationWeek Research in mid-October, more than half say their application support is managed by a combination of their ASP and the software vendor and developer. Only 11% of the companies reject assistance from outsourcers, preferring to manage application support in-house. Another 11% of ASP customers report that their IT shop works alongside their ASP, software vendor, and developer to manage application support.

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