ASP: With the rental market growing, Nick Huber investigates
whether users can expect value for money
IT analyst Gartner has warned that eight out of 10 application
service providers (ASPs) will not deliver the service level
agreements (SLAs) promised to users. Gartner also warned users to
keep an eye on the amount of additional fees paid to consultancies
for migration and consultancy work after the contract is
signed.
Elena Christopher, senior analyst for e-business services at
Gartner, said most ASPs would fail to deliver crucial SLAs because
they had not agreed performance targets with other suppliers
involved in delivering different parts of the ASP service.
"How can ASPs deliver to the customer if they don't have SLAs
with partners? As much as 85% of ASP contracts will not be able to
meet the SLAs they sign up to," she said.
Christopher also warned companies to be aware of the hidden
costs of using an ASP. She said ASPs get the majority of their
revenue from charging users extra fees for consultancy and the
migration of data. "ASPs are charging for data migration on a
hourly basis. This could take from one to six months and defeat the
cost element of using an ASP," she said.
But ASPs have hit back. Vistorm's David Angwin stressed the need
for prospective users to carry out thorough financial checks on the
durability of their ASP.
He denied that ASPs were charging users for unnecessary
consultancy work. "Quite a lot of companies are looking to deploy
pretty complex systems, such as ERP systems that require
integration at the customer end. There has to be some consultancy,"
he said.
Christopher predicts steady growth for the ASP market. The
standard pricing model is likely to remain a monthly flat-rate
charge, although alternative charging models are emerging, she
said.