Office on ASP gets dubious response

Simon Moores

Tech talk

According to one report, Microsoft is encountering resistance among US customers to Office Online, "one of...

Simon Moores

Tech talk

According to one report, Microsoft is encountering resistance among US customers to Office Online, "one of the first tangible deliverables" of its .net plans.

This is a discouraging sign not only for Microsoft but also, potentially, to the emerging application service provider (ASP) industry where many, if not most, of the available service offerings are building business plans around the delivery of Office productivity applications.

Microsoft's Office Online, launched a year ago, allows users to access Office 2000 applications as a hosted service. A modest number of ASPs have been licensed to host the software, customers seem to be unhappy about what they view as the limitations of the Office Online suite as a Web-enabled service.

This apparent uncertainty or absence of support for the Office Online proposition remains symptomatic of how the emerging ASP industry, regardless of universal industry investment and support, has yet to convince its audience that this really is the way to deliver business computing in the 21st century.

At ASP World in London, I was left with the impression that the participants, telecoms firms, suppliers ASPs, infrastructure partners, and many more, were still selling their new religion to an audience of industry converts and not to prospective customers. Certainly the business opportunity remains but real business prospects appear to be detached from the repetitive technicalities of such conferences and are perhaps more interested in the real business issues: how much, how secure, and how viable.

These events can leave one with a constant sense of deja vu - partner logos change but the presentations remain the same. However many ways the industry might try and cut the cake, there are only so many things one can say and ways in which one can sell the benefits of application service provision.

You will have heard me say before that the ASP industry is simply a symptom of much greater change, one being driven by the Internet and Internet standards, which is now sweeping through the IT and telecommunications industry.

The software giants, desperate in their efforts to identify a new and sustainable revenue model, need to move away from the constant cycling of upgrade to grow their income. What remains uncertain, regardless of billion-dollar predictions, is whether any part of the business spectrum is ready quite yet to buy into the idea of "software as a service" before many of the ASP start-ups, as predicted by research company Gartner, simply exhaust their investment capital.

Will ASP be a longer-term success? Quite probably. Will it evolve as predicted? Possibly not. Are the financial forecasts reliable? No, they are optimistic. What does the industry lack? A sense of maturity as opposed to the feeling of a grand experiment in progress.

Simon Moores is chairman of The Research Group

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