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The buzz at ISPCON.

The application service provider (ASP) model, barely two years old, is changing. Much like the sudden (but expected, in some camps) redirection of the dot-com world, ASPs are migrating from the out-of-the-box software rental model to the outsourcing of operating systems and other vertically oriented business solutions. As analyst Mary Johnston Turner of Boston-based Nervewire says, "Business solutions will be sold as packages rather than piece-part solutions."

To view the ASP model of the future, take a look at Telera, which we caught up with at the recent ISPCON/ ASPCON conference in Orlando, FL. The California-based, six-month-old company calls itself a business communications ASP, which means it serves as an enterprise's telecommunications and e-commerce outsourced partner. Telera happens to concentrate on the telecom side; CreekPath of Colorado, another ISPCON/ ASPCON exhibitor, provides data storage services. OtherASPs are providing security, network management and videoconferencing, as examples.

"ASPs will become the logical point for application-level customer care," says Turner, "and for supporting data warehousing, data mining, analysis and synthesis."

At ISPCON/ASPCON, the metamorphosis of Internet service providers (ISPs) into ASPs also was evident. For ISPs, it is an obvious fit. They already are connected to the enterprise network, and they need additional revenues beyond the monthly dialup and broadband fees. This convergence of the new ASP model and the "old" ISP network is occurring rapidly and will likely force many startup ASPs out of the market.

Not every ASP, however, will evolve from an ISP. Telera, for example, has set up its own. Internet protocol (IP) network of servers to provide a variety of services, such as interactive voice response, call-center personalization and unified messaging. In effect, ASPs like Telera offer the enterprise the opportunity to forego the purchase of its own telecommunications system, the hiring of people to maintain that system, and the hassle of constantly updating operating system and software programs. The savings to the enterprise are far greater than in the software rent-as-you-use model; and the revenue to the ASP is far greater than the income from dialup and broadband fees.

According to Robert Thronson, Telera vice president of business development, the response to this new ASP model has been good, contradicting the reports from several sources that enterprises have been slow to accept outsourcing of critical operations. "When we go into Fortune 1000 companies, there has been a lot of excitement and, actually, the sales cycles are a lot shorter than we had thought when we started this business.

"The ASP market is very broad, but there are a lot of vertical applications," he adds. Enterprises "can outsource the infrastructure, the delivery infrastructure, the hosting of the application and the development of the application. It's end to end.

"Sometimes, enterprises think this is too good to be true, so they want to try it first," Thronson says. "What we're finding is, we're taking three to six months for people to go through trial or initial applications before they're willing to step up and give us all of their business."

Of course, the positive take on the ASP space should be expected at a show where so many companies have so much at stake in the success of this evolving outsourcing option. What is clear: ISPs and carriers will increasingly move to the ASP model, offering enterprises the ability to move more of their critical network operations to off-site partners.
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Title Annotation:Industry Trend or Event
Comment:The buzz at ISPCON.(Industry Trend or Event)
Author:Anderberg, Ken
Publication:Communications News
Geographic Code:1USA
Date:Aug 1, 2000
Previous Article:From packets to streams.

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