The application service provider (ASP) model has been widely hyped as the industry's need for easily managed and accessible Internet applications increases.
It has also been identified as a solution to a number of network manager's problems: increasing network complexity, continual need to train and retain employees, cost of application purchase, installation and improvement.
Forrester Research has estimated the ASP market will have grown to $6bn by 2001. However, this reality has so far failed to meet the unfortunately lofty expectations of the market and ASPs must be wondering why the market is not rushing to buy their services.
As yet, customers simply cannot afford to trust the services provided by ASPs, if those services are not guaranteed. Therefore, they are reluctant to outsource their mission-critical applications. Network managers are responsible for the network whether the applications are managed in-house or not, so they need 100% confidence in the reliability and performance of their mission-critical applications.
ASPs must clearly define their service provision responsibility, which is the first stage in gaining customer trust. The ASP must participate in setting up and adhering to clear, realistic and manageable service level agreements (SLAs), which define the boundaries of their responsibility and ensure problems and delays can be pinpointed and dealt with immediately.
By defining responsibility in this way, customer trust will be established and the customer will be clear as to what services the ASP will deliver. Service levels should be measurable so that customers have proof that they are receiving the service level for which they are paying. SLAs must also allay customer fear with regard to the billing of the services provided. Potential customers fear they will be locked into an inflexible rate structure and will have no way of knowing if they are paying for the level of service that they receive.
Gartner Group predicts that 60% of ASPs will fail by the end of 2001. Those that want to stay ahead of the competition must look to provide differentiated services, guarantee performance and build customer trust.
ASPs must ensure that their main priority is to have an application infrastructure in place, which will accurately measure and control the performance of the mission-critical applications being provided. This provides a framework for the maintenance of an SLA, dealing with areas such as provisioning, quality of service, performance analysis, application management and application-based billing.
ASPs have to be able to monitor and manage application performance so that they can prove to their customers that performance levels are being reached and maintained. The SLAs must define the performance level to be achieved and also be realistic. If they are not, the ASP will be unable to live up to its customers' requirements, which will automatically destroy customer trust - and loyalty.
Having a detailed understanding of the network is equally as important for ASPs, who may find they are blamed for all network problems and need a solution that can determine the cause of a bottleneck to ensure they are not being held responsible for difficulties beyond their control.
Ultimately, to gain the trust of the application user, the ASP must guarantee the quality of service promised in the SLA and mission-critical application performance. When ASPs are eventually able to deliver these targets and prove they provide value for money, customer trust will have been achieved and the ASP market will achieve its true level of potential.
To gain the trust of the application user, the ASP must have a solid understanding of the importance of the application in the overall business and be able to reflect this in the way the application is delivered, managed and controlled.
Todd Krautkremer is vice-president, worldwide marketing, Packeteer
This was first published in November 2000