Once upon a time, when computers were so expensive that not all companies could afford them, most of the processing was performed by specialized firms that rented computer time and services. Some of these organizations have a long history of providing such services; for instance, ADP. The development of Internet and Web-based applications has offered these firms a new infrastructure to offer their services. These companies are known as Applications Services Providers (ASPs). ASPs provide mainly software applications for the basic business functions of a company: human resources, accounting or customer relations, but there are also some organizations targeting the software development domain.
ASP Tools for Software Development - Working with an ASP (Page 3 of 5 )
Working with an ASP could give specific advantages, but also carries some risks. Here some of the differences between externally-hosted tools and an internally-managed solution
Specific advantages of ASP
Faster evolution of the product: instead of having to distribute patches or upgrades, the supplier can work directly on the centralized product.
Easier cost identification: all direct costs related to the tool are on your ASP bill.
Unique channel for all application support issues: your vendor cannot argue that the tool doesn't work because you have installed it with an OS or a database version that is not supported.
Formally negotiated service level agreement: you can set application availability levels and support response-time objectives... and discuss penalties in cases these objectives are not achieved.
Smaller initial investment: ASP products are often billed with a monthly fee payment scheme. You don't have to make an important up-front purchase investment.
Neutral solution for multi-organization projects: if you collaborate with external organization's, an ASP provides a neutral ground to work with. It will also eliminate the problem of having outsiders accessing your information system to share one of your tools. Finally, it can also be abandoned after the project completion if it is not needed.
Trial period for new software: if the vendor offers to sell or host its solutions, using the hosted solution initially can allow to seriously test the software and the vendor support before buying it and installing it internally.
Risks associated with ASPs
External storage of data: your data is not on your hardware and you have less control on its management and who can access it.
Greater dependability on the supplier: if there is a serious problem with your ASP company (or the company your tool supplier uses to host its services), you will not be in the situation where you have an application without support like internally managed apps. Access to your application and your data can be reduced or suppressed.
Sharing resources: processing power, bandwidth and support have to be shared between ASP customers that could have their own priorities, needs and agenda. If the number of customers increase, performance could suffer. Technical problems could also arise from many instance of the same application running on the same machine.
Internet related availability risks: even if things work usually fine, accessing net servers is always subject to specific risks like viruses or denial of service attacks.
Some questions that you can ask when you choose an ASP
Is the hosting managed internally or performed by a third-party hosting company?
What are the security features of the application?
How is your data handled and what are the means you have for accessing it?
Are special measures (availability of source code for instance) provided in case of difficulties of the supplier?
What are the metrics for measuring the service level?
How much can I customize the application to satisfy my particular needs?
Would it be possible to internalize the application? Is there another exit strategy?
What are the staffing levels and the technical expertise of the supplier's staff?
The data problem
Security of the data is the most important potential issue for companies using an ASP. Vendors have put in place different measures to answer these fears:
Extended security administration
Encrypted data communication
Functions to export data
Availability levels guaranteed in SLA (Service Level Agreements)
The overall message from ASP to prospective customers is that their data will be handled as good or better than in their internal data center, because they are specialized in managing web-hosted applications. Many ASP offer a trial period, it could be wise to try before you buy.