ASP Industry Consortium White Paper Focuses On Service Level Agreements; Guide Addresses Consumer, Vendor Questions About SLAs.

Business/Technology Editors

COMDEX Fall 2000

LAS VEGAS, Nev.--(BUSINESS WIRE)--Nov. 14, 2000

As part of its efforts to provide insight into key portions of the application service provider (ASP) computing solution, the ASP Industry Consortium today released a comprehensive white paper on service level agreements (SLAs). The white paper was part of a presentation made by Consortium officials during a press conference at COMDEX Fall 2000.

The Guide to Service Level Agreements is intended to help application service providers (ASPs) develop and implement service level agreements (SLAs) with their customers and partners, according to Eduardo Pontoriero of Compaq Computer Corp., who chairs the Service Level Agreement subcommittee for the Consortium's Best Practices Committees.

"While the white paper was primarily developed for those who negotiate contracts with customers and partners, it will also provide consumers of ASP services with valuable information and insight into SLAs," noted Pontoriero.

Pontoriero emphasized that the SLA Guide being introduce is the first step in creating a "living document," which will be updated regularly as new insight into ASP customer and partner relationships are realized.

The 75-page white paper includes an introduction to the ASP industry, and incorporates the input from an ASPIC-sponsored survey targeted at service providers and end users that was designed to gauge the importance of service level agreements. In it, business professionals representing a wide variety of vertical markets verified that SLAs are central to the ASP relationship, Pontoriero noted.

"The rise of the ASP model, the evolution of e-commerce and the increasing maturity of the network infrastructure have raised the service expectations of end users," said Pontoriero.

The majority of end-user and vendor respondents to the survey indicated that service level agreements are the best method for ensuring that hosting and e-services outsourcing arrangements work to the satisfaction of all parties, and approximately 70 percent of those surveyed currently have an SLA in place.

The SLA Guide addresses the four key elements of the ASP value chain, including:

--Network

--Hosting

--Application

--Customer Care and Help Desk

While an ASP is typically accountable for providing an end-to-end SLA to its customer base, the inclusion of the four key components addresses the frequent requirement for ASPs to partner in one or more of these areas, Pontoriero said. Each section includes a set of SLA elements and, whenever available, related metrics and typical industry thresholds.

Recognizing, however, that even the most carefully drafted SLA will not always prevent disputes between the parties from arising, the Guide also includes a set of clauses conducive to resolving disputes arising from discrepancies between the provided service and end-user expectation. From the end user's perspective, it also highlights elements that are important in order to have a successful relationship with service provider.

"The source of the largest number of disputes is likely to be the gap between the actual performance by an ASP and the performance expected by the end user based on the terms of the underlying SLA," Pontoriero noted. "Thus, clear, well-negotiated SLAs that are comprehensive and well drafted are fundamental to minimizing the risk of disputes."

The white paper in its entirety is available to ASP Industry Consortium members only; however, an executive summary is available to anyone through the Consortium's web site at www.allaboutasp.org.

About the ASP Industry

An application service provider manages and delivers application capabilities to multiple entities from data centers across a wide area network, giving customers a viable alternative to procuring and implementing complex systems themselves. In some cases, ASPs even provide customers with a comprehensive alternative to building and managing internal information technology operations. ASP customers also are able to control more precisely the total cost of technology ownership through scheduled payment schemes.

Though the ASP market is relatively new, computer industry analysts foresee rapid growth and multi-billion-dollar annual sales within the next few years. End users cross industry lines and include anyone from the small office/home office (SOHO) client to large corporations and from complex businesses to specific verticals.

About the ASP Industry Consortium

Founded in May of 1999, the Application Service Provider Industry Consortium is an international advocacy group of more than 700 companies formed to promote the application service provider industry by sponsoring research, promoting best practices, and articulating the measurable benefits of this evolving delivery model. Its goals include educating the marketplace, developing common definitions for the industry, as well as serving as a forum for discussion and sponsoring research. Among the technology sectors represented among the ASP Industry Consortium membership are Independent Software Vendors (ISVs), Network Service Providers (NSPs), Application Service Providers (ASPs), as well as emerging business models and other sectors supporting the industry.

Information on the ASP Industry Consortium - including a full list of member companies - is available at www.allaboutasp.org or by contacting the Consortium's headquarters at: ASP Industry Consortium, Inc., 401 Edgewater Place, Suite 500, Wakefield, Mass. 01880; Tel: [phone]; Fax: [phone]; e-mail [e-mail].