Computers continue to penetrate deeper and deeper into businesses, affecting more operations all the time. As computer use increases, software licensing becomes a major expense and potential legal liability. Software vendors, including Microsoft, are increasing pressure on businesses to comply with license agreements. Failure to comply can lead to expensive legal battles and penalties.
Administering and maintaining all those computers becomes a significant burden as well. If your organization has more than ten people using computers (particularly if they are networked), you probably have someone on staff who's primary job is to keep them all running, or you outsource the task to a consultant. Updating networked software (e.g. workstation programs that share a central database) becomes a logistical challenge.
At the same time, more and more businesses are connecting their networks to the Internet, and some even have their own intranet, which is essentially a private Web server. Extending your network to include the Internet introduces new options in software licensing: Enter the Application Service Provider.
An Application Service Provider (ASP) offers access to software that runs over the Internet. Your employees use their browser to navigate to the service provider's Web site where they usually log in to the service. The software runs on the service provider's server and the data is held in a database on the service provider's network. You pay an access fee for using the service, which varies according to the service and length of contract.
ASP applications are becoming more popular as more businesses look to outsource their information technology so they can focus on their core business. Of course, like any software licensing arrangement, there are advantages and disadvantages.
The primary advantage of using an ASP is that the software vendor is responsible for maintaining the service. All you have to do is pay for it and use it. The vendor makes sure the service is available and is responsible for implementing software upgrades. Your Service License Agreement (SLA) dictates the extent of these responsibilities and covers how other important issues like backup are handled.
The primary disadvantage of using an ASP is your lack of control. You are dependent upon the ASP to live up to the performance standards spelled out in the SLA. Also, since an ASP is a Web service, the quality of your Internet connection is of critical importance: If you can't get connected, you can't use the service.
So, considering the uncertainty, why do businesses continue to flock to outsourced solutions like ASP applications? It can save you big money. In spite of the limitations of this paradigm, the cost savings generally outweigh the risks by a large margin. The total cost of ownership is much lower, you don't have to worry about licensing software for every workstation, and you can leave the technical details to the technicians while you concentrate on your core business operations.
The next time you are considering software for your organization, search the Web for an ASP application that does the job and compare it with your other choices. An ASP solution isn't right for everyone, but it might be right for you.