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ASPs Will Change The Way People Think Of Computing

Madanmohan Rao interviews Traver Kennedy, chairman, ASP Industry Consortium

Traver Gruen-Kennedy, chairman of the Massachusetts-based Application Service Provider (ASP) Industry Consortium, was named one of the year's "25 most powerful people in networking" by Network World magazine. The consortium has over 750 organisational members worldwide, and sponsors research, fosters standards, and articulates the measurable benefits of the evolving ASP delivery model. Revenues of the ASP industry are expected to increase to $7.8 billion by 2004. Trevor is the director of internetworking strategy at Citrix Systems, and has been ASPIC chairman since May 1999. He is a keynote speaker at the upcoming ISPCON/ASPCON conference (www.ispconindia.com) in Mumbai in April 2001.

Q: What were the top trends in the ASP industry in the past few years, and how is the industry evolving today?


The years 1998 and 1999 were devoted to introduction of the ASP model and education of the marketplace as to its benefits. By 2000, we in the ASP Industry Consortium, as well as in the industry at large, were able to start focusing on customer adoption through demonstrated success stories. It was also in 2000 that we started to see a broadening of the ASP industry, as well as some established movement into specific vertical markets like healthcare and education.

2000 also saw another exciting trend in the broadening of the ASP industry into the consumer marketplace. For example, 2000 saw the deployment of the iMode phone in Japan, which features some 4,500 applications available through a hand-held device. That's an exciting development, and something that bodes well for the consumer-focused market. 

Q: What are three of the most successful ASP practices you've come across?


I'll give you four: LearningStation.com; Verso Technologies; Resonate; and FuegoTech. These four companies were the winners of the first ASP Industry Consortium "ASPire Awards," which we presented at COMDEX in Las Vegas last November. These four were chosen by an independent review panel for excellence in the ASP industry out of nearly 100 entries into the competition. Each was able to help its client realise significant and measurable benefits through the ASP model. It's stories like these that will help speed customer adoption because they best illustrate for an end user how ASPs can enhance performance. 

Q: What was the vision behind the founding of the ASP Consortium? What is the size and scope of it today, and what are your growth plans?


When several of us who had been involved in the infancy of the ASP industry got together with the idea of forming a consortium to help promote this concept, I don't think we had any idea how enthusiastic the response would be. The theory was that a group of us working together could accomplish more in terms of market education than could any of us acting individually.

We launched the Consortium with 25 founding member companies in May 1999, and we've grown today to more than 750 member companies in 30 countries around the world. Our plans are to continue to grow as the need dictates, and we've spent much of the last year putting into place an international structure that provides for the creation of national and territorial groups where there is interest, all coming under the global umbrella of the ASP Industry Consortium. That idea has proven very popular, and will continue to expand as more and more countries become part of our membership ranks.

Q: As a discipline, how is the design, development and deployment of the ASP sector evolving? What are the market forecasts for the coming year?


ASP services will continue to evolve as the market dictates. For example, we've seen over the last year a proliferation of vertical market ASPs in areas like healthcare. These ASPs are responding to a specific market need for particular types of applications, with certain levels of customisation or scalability.

They're adding to an already broad market, which offers a whole host of business, educational, and consumer applications that range from complicated customer relationship management applications to easy-to-use consumer applications available through hand-held devices.

In terms of market forecasts, I would probably defer to some of the most respected and established names in technology analysis. International Data Corp. projects an ASP market with estimated revenues of nearly $8 billion by 2003. They have a tendency to look at an ASP definition that's a little narrower than, say, the Gartner Group, which projects ASP revenue of over $22 billion in that same time frame. Regardless of the ending point, both of these analysts - and a host of others as well - project tremendous growth rates for ASP services over the next two to three years. 

Q: What are the some common misperceptions you notice in the way companies are approaching ASPs?


One common misperception I've noticed is that some organisations might be reluctant to utilize ASPs because of security concerns. After all, they're being asked to outsource the provision, implementation and maintenance of what may be mission-critical business applications. I'd answer those concerns by noting that for ASPs, security is a key competency, and they've spent more time considering security measures than a majority of local network users, making applications run through an ASP more secure than most traditional network servers.

The other misconceptions I've witnessed all fall into the similar category of "comfort." How comfortable are organisations right now in outsourcing their computing applications and data? I liken it to something like payroll outsourcing, where businesses at first were very reluctant to outsource their payroll functions. Now, you would be hard-pressed to find a business that doesn't outsource payroll. I think people just need some time to become comfortable with outsourcing in general, and ASPs in particular. 

Q: How does Asia compare with the rest of the world in terms of adoption of ASP tools and frameworks?


Much of Asia is very well positioned for the adoption of the ASP model because of investment in things like telecommunications infrastructure. After all, ASP represents a convergence of telecommunications and information technology, so having that telecom infrastructure in place and at a mature phase is half of the solution.

Obviously, some areas are better suited than others at this point in time because of factors like government support or general issues of investment in information technology. But in other ways, Asia is very advanced in some of the framework for ASP adoption.

For example, there are many regions in Asia where wireless communication is more advanced than in the United States, and with wireless being a key component to the future of ASP adoption, those areas where wireless technology is well-established can really stand to benefit. 

Q: What opportunities open up for IT companies in the global ASP marketspace?


Like many advances in computing technology, ASP really helps to open up the world as a global marketplace. There are relationships where the ASP might be in one country, the data center in another country and the customer in a third. Obviously, as more and more markets become knowledgeable about ASP and its benefits, those markets are opened up to ASP services.

But ASP is also an industry where partnerships are vital, so a business needn't be an ASP to take advantage of the explosion in ASP popularity. Telecommunications companies, Internet service providers, software developers and vendors, systems integrators, infrastructure providers -- these are all part of the ASP value chain and all stand to benefit from ASP adoption. 

Q: What are your plans for the Indian market?


If a number of our members with representation in India desire, we'll follow the framework put in place in other areas of the world and launch a national committee in India that can draw on the resources of the global ASP Industry Consortium, but maintain a local presence that can address issues of regional or national concern. I would certainly encourage any companies located in India or with a presence in India to contact the Consortium about membership. 

Q: Any parting words of advice for Internet vendors and Internet professionals in India?


My advice would be to grab onto this train before it's too far down the tracks! It's already left the station, but there are still ample opportunities to become part of the ASP industry and help change the way people think about computing.


The writer can be reached at madan@techsparks.com


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