According to industry analysts IDC Application Service Providers, or ASPs, are very hot growing at 21% compound annual growth over the next few years. The last time I heard this was back in 2000 when the phrase ‘the internet changes everything’ was used to excuse every technology idea, crazy or otherwise. How can something that died so convincingly back then be hot again so soon?

ASPs were supposed to provide a new generation of applications required for a new generation of web based business services starting with Business to Business exchanges, and provided as a ‘shared services’ model. The idea quickly exploded into the best way to deliver existing application, got hyped to the point that its ability to meet the expectations that it created was zero, and in the cold hard world post 9/11 the ASP model seemed to have died.
Forecasters are notorious for being wrong so what’s it all based on this time? Is it all on the CRM market where several players are building an ASP business, and have grabbed the magical 10% share that usually leads to market change? As ASP SalesForce.com proved its not the ‘A’ that’s important any longer it’s the ‘S’, as the emphasis changes from delivering monolithic ‘Applications’ to granular ‘Services’. This ties up with the Industry excitement and trend towards ‘services’ with everything using ‘Service Oriented Architecture’, but this is more than a technology change.
We seem to be moving forward into a much more distributed business world with more virtual businesses made up of groups of specialised businesses contributing their individual values to the brand owner. Big company support currently means something like a 1000 users all on the same site, but what happens if the requirement is to support the same number of people spread across 10 sites, or even 20 sites? Different game! Even more thought provoking is supporting a community of different businesses with some common software, as and when, needed for a particular business activity that may be of a temporary duration?
Could ASPs be the way to build and manage support for distributed businesses which need to interconnect their processes with other business using a mixture of self describing services and open standards? Complicated statement, put simply it means a different world based on granularity in the market, business, users and software, just as ASPs mean a different delivery model. The new ASPs take full advantage of the technology shift starting with cost gains from virtualised servers, through to their code being written as a series of tasks to be orchestrated into processes using Services Oriented Architecture.
So are ASPs the face of the new software and outsource industry? Currently I am not sure of the answer, but I am sure that there is a need to think carefully how we should evaluate the use of ‘services’ in the business. We certainly should not dismiss too lightly the resurgence of the ASP model without some serious thought around a new context for use.