The initiative involves what state officials described as an "unprecedented agreement" covering the use of Microsoft Office applications.
The ASP agreement with Cox Business Services, reached earlier this month, is only the latest of a series of contracts designed to boost IT facilities in the state's educational establishments. The Arizona School Facilities Board has awarded $172m (£119m) worth of school IT infrastructure contracts so far this year.
Philip Geiger, executive director of the board, said the Cox contract will provide school administrators and students with access to more than 7,000 software titles at a cost of $8.16 per student per year. The ASP deal involves what Geiger described as a "revolutionary and unprecedented agreement" for the use of Microsoft Office by students both in school and at home on a round-the-clock basis.
Industry observers agreed that the Arizona ASP deal has set some records. Neil MacDonald, an analyst at Gartner, said the Arizona initiative "is definitely the largest [ASP contract] for Office" in terms of the number of users.
MacDonald also said the agreement to allow students to use Office both at school and at home marks a change in Microsoft licensing practices. "Typically, if you want to use [Office] in two places, they want to charge you for that privilege," he explained.
The sheer scale of the Arizona contract could provide a boost for the ASP industry as it bids to penetrate corporate enterprises, said Ted Chamberlin, a Gartner analyst specialising in the ASP market.
"The timing of this contact could not be better" for the ASP industry, which has seen corporate clients take a cautious approach to the ASP model, he said. "This is a big deal for the ASP industry."
Moving to a computing model that hosts all the applications in a central location makes sense for schools, which often don't have the technical resources or the personnel to upgrade and troubleshoot software applications locally according to Craig Larson, chief executive officer of North Cox subcontractor LearningStation. The model will also enable schools to cut costs by eventually deploying network appliances or thin clients, he added.
But hosting applications also puts the burden on the network, he explained. "We live and die by connectivity," he said, claiming that the $100m contract that the School Facilities Board signed with Qwest Communications International in February will provide the level of connection required to support the ASP set-up.
"This network was designed specifically for the ASP model," Larson said. "No one has ever done anything of this magnitude."
MacDonald said the high network speeds needed to ensure that students and teachers can quickly retrieve applications and files over the network could be a problem. "It will be hard to run Office from home" over a 56K modem, he said.
Robert Carter, a vice-president at Cox, agreed. He said his company plans to promote high-speed cable modem services to the home to ensure students have the required bandwidth.
The School Facilities Board's Geiger said he views the ASP initiative as a way of bridging the educational divide in Arizona. Once every schools is hooked up to the network at the start of the 2002 school year, Geiger said, all students in Arizona will have equal access to a wide range of educational computing tools, whether they attend classes in a Phoenix suburb "or a remote school on an Indian reservation".
The ASP deal is just one part of a crash effort to rebuild schools and upgrade their computer and communications resources following a 1996 Arizona state Supreme Court ruling. The court decreed that Arizona must provide "equal" access to facilities and equipment for all students in the state by 1998. Following the ruling, the state took over financing of school infrastructure from local districts, funding the construction of buildings and centralised purchasing of computer resources.