Web-based Services : An Empirical Study Of Their Adoption And Penetration

Application service providers (ASPs) and web services are becoming an increasingly popular alternative to selling software the traditional, “shrink-wrapped” way. This paper presents the results of an empirical study of the German ASP market. We surveyed a representative sample of companies traded on the German equivalent of Nasdaq. We asked questions about the companies’ expectations and practical experiences with ASP-based services. The results confirm that ASPs are definitely on the rise. However, several problems remain. Most potential customers are concerned about the confidential treatment of their data once it has been transferred to the ASP site. Quality of service and maintenance need to be agreed upon in advance, in contractual form. Finally, numerous potential customers have problems understanding the ASPs’ offerings in sufficient detail. A more transparent marketing, coupled with a more personalized sales approach, should be a major concern for the ASP industry as a whole. The results of our study should be of interest both to ASP companies, to help them improve their services, and to IT management as a whole to help them decide which (if any) of their enterprise functions would gain from using ASPs.. 2 THE APPLICATION SERVICE PROVIDER MODEL Definition Application Service Provider: In this paper we follow the definition provided by IDC: “ASPs provide a contractual service offering to deploy, host, manage, and rent access to an application from a centrally managed facility. ASPs are responsible for either directly or indirectly providing all the specific activities and expertise aimed at managing a software application or set of applications.” In this definition, IDC is refining the term by naming defining characteristics such as application centric, selling application access, centrally managed, one-to-many services, and delivering on the contract. Application centric, selling application access, and centrally managed refer to the fact that the application is hosted (often by an ISP), that it is managed , and that the business model is based on selling access to this centralized service. The term one-to-many services refers to the fact that ASP applications are usually nearly identical for all users, providing for minimal customization. Delivering 1 Gillian, Clare M. (1999), The ASPs Impact on the IT Industry, an IDC wide opinion