Why pay-as-you-go won't hold you back

Brian Clegg spells out the advantages of applications on demand versus working off the PC's disc

Brian Clegg spells out the advantages of applications on demand versus working off the PC's disc

The emergence of application service providers (ASPs) has prompted a re-examination of how PC applications are delivered to the end-user.

An ASP offers outsourced applications, which are paid for on a time-based rental or for each use. Applications and data are usually hosted by the service provider, reducing the support burden on the customer.

Applications held remotely have been available for some time. They use middleware to allow a dumb terminal to run a program on a server and only handled the user interface locally. Using the Web to carry out an e-commerce transaction is an extension of this approach.

Sun Microsystems' Java programming language proved successful in producing small applications that could be downloaded or run from Web sites. Sun and software house Oracle envisaged a future where traditional software was replaced by suites of Java components, downloaded on demand from the Web.

Hard choices

There are pros and cons with applications installed on a PC's hard disc, running them from a network or moving to an ASP. A pure PC installation is still the most common for personal productivity applications. The installation is robust in the event of network failure and requires minimal adjustment to run on a laptop. Purchasing costs are clearly identified. Experienced users feel in control of their environment.

However there are negatives. The support cost can be high, especially when a new version is installed. While power users benefit, less experienced users can feel isolated, and support staff find it difficult to deal with tailored installations.

A final concern is security. It is quite possible for all data to be held on a local area network (Lan), or automatically backed-up to one, but many PC users still hold data locally. This is useful if the user is mobile, but increases the risk of data loss and security breaches.

Moving the application to the network overcomes some of the problems. Upgrading becomes a simple matter of updating the network copies. If the application is run directly from the Lan, users are restricted in the degree of tailoring they can apply. However, even the latest Lans are slower than hard disc access and bottlenecks are a common problem. This problem can be overcome by a hybrid system that checks for a new version of the application on the network regularly, but runs the program from the PC, or laptop, hard disc.

Browser based

The ASP approach is a step further from the desktop. If the delivery mechanism is the Web and browsers, a big advantage is universal usability - the system can be deployed on anything capable of supporting a Web browser, down to the next generation of mobile phones. Software components can be held locally to allow users to work when disconnected from the Web, but data should be uploaded regularly.

The flexibility of this approach means that an organisation can set up a new office tomorrow and have the applications in place immediately. Another big advantage is that the service provider will handle application upgrades, data security and support. This may not be popular with in-house support departments, but enables managers to concentrate on the core business of the company.

The biggest drawback to using Web components is a lack of software. Both Lotus and Corel announced applet-based office suites, but the early examples were slow and had fewer functions than their hard disc counterparts. Lotus now sees this approach as more suited to smaller, business-focused applications.

A variation on the ASP strategy avoids the problem of slow delivery. Here a conventional application is used, but with a proprietary piece of software interposed that fools the application into thinking it is running on a PC, when it is actually being executed on a server. This has the benefit of being easy to use with many existing applications. On the negative side, not every delivery platform can provide it, and many potential customers are wary of being locked into a proprietary delivery mechanism.

Access guarantees

Whichever method is used, users must be aware of how much access is provided. Some ASPs do not guarantee connectivity service levels. Others are working with telecommunications companies to bring in service level agreements.

If you are looking to an ASP to solve the problems of support, take into consideration the appropriateness of the application. The early business models of ASP envisaged the market being driven by small and medium sized enterprises, looking to save money on expensive enterprise resource planning (ERP) systems. In practice, according to a study by IT market analyst Ovum (ASP Opportunities and Risks, January 2000), the biggest application drive is likely to be for the sort of systems that work best off the shelf - desktop productivity and back-office functions such as payroll, rather than business-critical systems or unified ERP solutions.

ASP is certainly going to revolutionise the way that some types of software are managed. A recent US survey by Deloitte Consulting valued the ASP market at $10bn (£6.25bn), rising to $50bn by 2003. Dataquest suggests more conservative estimates of $2.7bn and $22.7bn.

IT departments are enthusiastic because of reduced support costs and speed of deployment, combined with the ability to make user departments more directly responsible for software costs. Users can see this is an opportunity to get out of the grip of a dominating IT department, and be able to choose the tool for the job when and where they want, rather than following organisation-wide standards. This conflict will need careful managing, but sensible deployment of ASP is liable to be beneficial to all.

Pros and cons of ASP


  • Universal usability

  • Easy upgradability

  • Improved security

  • Reduced support costs


  • Lack of software

  • Slowness of delivery method

  • Missing functionality

  • Lock in to proprietary delivery systems

ASP sites to visit

Industry-wide consortium

Microsoft/Compaq/Esoft venture. Demonstrations of Word and Excel using Citrix technology

Leading ASPware provider

Oracle's ERP via ASP approach

Major US ASP

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