ASP model may erode IT departments

IT departments in big companies will be revolutionised if the application service provider (ASP) model takes off.

ASPs - originally expected to be more attractive to smaller firms - are already a hit with large companies, according to a survey by Durlacher Research of 500 UK companies with revenues of more than £75m. Around 10 per cent already use some ASP facilities, and 22 per cent either use or are trialling ASP services. Another 19 per cent plan to invest in ASP services "at some stage".

"The ASP model takes away some of the non-core processes and frees up the IT staff for other things. This is being fuelled by the IT skills shortage - it's not a threat to staff," said Sarah Skinner, Durlacher internet analyst.

As electronic markets and ASPs cut the amount of IT carried out in-house, organisations could soon be trying to oversee systems vital to their business but which they no longer own, according to Guy Hains, UK chief executive of Computer Sciences Corporation.

"The complexity could move out of the enterprise. Although the total system will be more complicated, and the business management of this system will be more complex. There is a big simplification opportunity once you have the suppliers taking all this on," he added.

"As the transactions move outwards, you need an IT department that understands how to work with that, but most are very inward looking. The whole business moves out to the supplier and to the customers: they become the decision makers, and have the power."

First published in Computing

See also:

ASPs - the next big thing?

Everyone is talking about application service providers and how much money and staff resources they should be able to save customers. The new outsourcing model has yet to be taken up to any great extent, however. vnunet.comlooks at the phenomenon and tries to inject a note of reality into the hype.  30 Nov 2000

Accpac endorses ASP model

Accountancy and ebusiness software company Accpac, a division of Computer Associates, has established itself as an application service provider but has pledged to remain loyal to its channel.  05 Jul 2000

HP favours partners' move into ASP market

Hewlett Packard has announced plans to move half of its Open View channel partners' licence sales to an 'apps on tap' rental model by the end of its next fiscal year.  07 Jun 2000

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