Monday, April 30, 2001		Article

Companies that rent specialised software
By Sumesh Raizada

AS industries, educational institutions, commercial establishments are getting computerised, several new software applications are getting developed to support their operational functions. The Internet has given further boost to the already growing hardware and software industry by providing unlimited scope of data or information access. Organisations are now improving their productivity and profitability by utilising number of services and applications that are available through the Internet. Call centres, e-mail, video conferencing are among activities that are already in wide use among private as well as government departments.

Commercial enterprises require specialised software packages for their finance, marketing or manufacturing functions, some of which are purchased from outside software vendors. However, the cost of procurement, maintenance and updating gets prohibitive. Also due to the continuous change in the market requirements, companies are quite often forced to abandon the recently purchased expensive software and go in for the latest packages.

In order to provide solution for this unavoidable cost-incurring problem, companies are turning towards ASPs or Application Service Providers. These are companies or service providers that rent specialised software to the client companies, over the Internet or other communication network. Software packages or applications are located in the computer server of the ASP, who then provide access to these packages to all those who are willing to hire them. Customers subscribing to the services have to pay a monthly fee or hosting charges for the applications utilised and to gain access to the computer server of the ASP. In other words, companies instead of keeping application packages on their own computers place or hire those packages on the ASP centralised servers.

The ASPs host and manage software applications specific to each client over their Web site. They also maintain all necessary hardware required for providing those services. Thus by outsourcing their software application requirement, companies or individuals remain free from all botheration and hassles of setting up and maintaining the required IT infrastructure.

Company executives can access the stored data on the ASP server with the help of the Web browser irrespective of operating systems. Both large as well as small enterprises benefit from the ASP in many ways. Small companies that have a tight operational budget, still wants to function on the latest IT trends, hire ASP services that are relatively cheaper. On the other hand large enterprises, which have offices or staff scattered at far off geographical areas, finds it expensive as well as difficult to maintain separate infrastructure at all locations and hence outsource their requirement to the ASP. This helps the companies to concentrate on their core task and also reduce cost on IT infrastructure.

Some important functions that are performed by the ASP are to provide customer services on behalf of the client, manage billing and other accounts related activities, etc. Hardware involved are Web servers, firewall server and back-up mechanism. The ASP concept is gaining further momentum due to widespread reach of the Internet to every corner of the globe. Further, with the introduction of broadband or DTH services, access has become easy, faster and cheaper. Where clients have similar needs, they may share the applications on the ASP centralised servers. Mostly ISP are providing this service through their centralised servers, but some networking and software firms are also engaged in client specific services on the Net. Further, craze for e-business has led to many small establishments to assign their Net-based operations to the ASP. This has encouraged many Web portals to enter the business and start providing specific Web-based applications.

The ASP has scope in automobiles spare parts distribution and dealer network, transportation, education or training, and in corporations with wide network of operations. Telephone companies and large software companies also hire the ASPs. Specific customer-related services like in credit cards, banks, may be conveniently rented through ASPs, who manages queries and act as a call centre. Through specific ASP software, firms can organise resources like CDs, videocassettes, maps and drawings. In some areas ASP even process information, data or reports and client simply have to access the result and utilise the information. In this way, paperwork, manpower requirement and error get reduced considerably hence efficiency gets improved.

In India, where population of small-scale and medium-sized industries or commercial establishments is large and end-users of products or services are scattered to wide geographical areas, concept of ASP is extremely relevant. Satyam Computer Services, an ISP, has invested millions of rupees in establishing application-based services for enterprises. Similarly Aptech, through its subsidiary, is providing application and solutions to manufacturing industry. Software firms in Delhi, Hyderabad and Bangalore are also renting out specialised software developed by them. PreExams.com is a Hyderabad-based online examination ASP through which colleges and educational institutions promote their services, conduct online examination, admissions and registrations.

It is estimated that there are nearly 300 ASP providing over 80 types of applications worldwide, ranging from enterprise resource planning, e-commerce, communication, voice mails, CRM, etc. Others provide business software like Windows, documentation software for medical industry, pay packages, transportation and cargo-related software. Most of the companies hire ASPs who have sound network and background of handling client-specific applications. Moreover ASPs need to have secure and reliable network to avoid system breakdown. Nortel has recently designed Internet data centre for providing ASP services. Other major companies that are in ASP business are Cable & Wireless, Sun Microsystems, Hewlett Packard Co., etc.

Some other global application service providers are AristaSoft having one of its offices at Hyderabad also, Adlex that offers service management solutions and Web key site parameters, Andolan, an ASP that offers services related to legal and health care industries. In India there are around 30 ASPs that include I-Flex, Global Telesystems, Intelligroup, Eastern Software Systems that are offering banking, financial and marketing packages. Companies are also engaged in hosting domains and providing data centres, networking, gateways, etc. ZEEsolutions.com, a Web portal, services its clients on IT and e-business related applications.

Mostly companies in healthcare, transport, insurance, finance, software or e-commerce areas hire the services of ASPs on rentals. This saves them from cumbersome task of software installation, license fees and also helps in saving money in case wrong software is selected or technology gets obsolete.

It is expected that ASP market shall grow tremendously worldwide in the next couple of years. It is slowly picking up in India and is likely to expand to Far-east Asian countries like Malaysia, Korea, etc. ASP offers hosting services, which are either client or Web-based. They operate and maintain the applications on their servers and hence employ professionals to manage those applications. People are also employed to develop specific client based software or applications. These may be Web designers, networking engineer, or data base analysts. Further, hardware engineers are required for maintaining servers and other equipment and providing also necessary technical support. Professionals also work for marketing of the specific services and settling commercial and legal issues. People are employed as accounts or finance executive also to manage the billing and payment of clients.