Jeremy Gittins confirmed last week that “Office has not taken off as quickly as we thought” in the ASP market.
He argued some applications were “just better on your hard drive because that’s the way you’ve always used them and that’s the way you will continue to use them — and Office is one of those products”.
He added that other Microsoft applications such as Exchange were better placed on a managed service, especially for SMEs using it on hosted sites: “There is every opportunity for Exchange to become part of the ASP industry,” Gittins claimed.
But despite his reservations over the potential for Office as an ASP product, he remained convinced it would gain acceptance.
“ASP will happen. Will our business model change because service applications are hosted on the Net? No. We’ll stick with what we’re good at — software — and rely totally on partners to deliver products bundled with their services.” Gittins suggested the channel would become more important in an ASP model. “I’ve seen ASP services sold because they’re ASP services.
A lot of ASP services today are sold on product features — not product benefit —and I think the channel can help here.”
Neil Easdon, managing director at ASP Jefferson County, which specialises in Tivoli and Unicenter TNG, agreed products like Office were probably unsuitable. “It’s such a simple product, where’s the benefit?” He argued ASP was more likely to take off where the products were more complex and there was a benefit to the customer in terms of saving on skills resource and costs. Tukun Chatterjee, product manager at ASP Netstore, also agreed that Office was less suited to the ASP model.
“Office runs better on a hard drive than it does on a hosted environment, which is why we don’t do it ourselves, whereas Exchange 2000, on the other hand, is a superb product that is set up beautifully for Internet delivery, and that’s why we do it.
“I don’t think Jeremy is saying anything particularly controversial. He said Office isn’t selling too well on an ASP model, and it isn’t, but it’s not really an ASP product at the moment.”
David Mills, commercial vice president at FutureLink Europe, claimed the ASP market had not taken off as expected. Although FutureLink had experienced some acceptance for Office as an ASP product, it had mainly been as part of a building block in an overall system.
“We all thought that simple applications would be the killer,” he commented, but it had proven not to be the case.
Mills added SMEs had proven resistant to the ASP argument. Many did not know what the term meant and they were often culturally unprepared to outsource aspects of their business.
Microsoft announced technical resources, partnerships, licensing and certification programmes to support ASPs, covering Windows 2000, SQL Server™ 2000, Exchange 2000 and Office 2000, in July last year as part of its Microsoft.NET approach.
This was first published in March 2001