USinternetworking Presses ASP Advantage

Computergram International, May 24, 1999

Outsourced application provider, USinternetworking Inc understands that Hewlett-Packard Co's pledge to supply $500m of its kit to Qwest Communications Inc for delivering SAP applications is a commitment to finance HP equipment when ordered. It wonders how a phone or equipment company is going to resolve "those well known SAP implementation issues" or support SAP applications going forwards when integrators such as KPMG and Andersen Consulting find the "delivery of SAP challenging."

Qwest has struck a similar deal with Siebel Systems. From what can be gleaned it appears that Qwest will be selling the Siebel for Workgroups package that will be available in July or August. The thin-client configuration is said to be able to handle up to 100 sales reps. It's a new reseller channel for Siebel even if the product is heavily discounted, and provides an opportunity for step-up sales to other Siebel products. USinternetworking says that it remains the only channel for Siebel's outsourced SiebelNet product and expects to sell Siebel for Workgroups too.

As far as USinternetworking is concerned, the recently-formed ASP Industry Consortium brings together only "adjunct participant and suppliers" in the market. Citrix Systems Inc, which chairs the group, has a place USinternetworking notes, but says it is PeopleSoft, Lawson and other ERP applications which are really driving the ASP market. Even its ASP rival Corio Inc is not a member of the group. USinternetworking says it isn't going to spend time on it.

The company says it expects to offer additional IMAP products by building and buying technology. It says it will probably make a couple of small acquisitions to add services expertise in this area but currently has no targets in sight.

Meantime, as the ASP application service provider market builds so does a cottage industry that will feed off it. FirstSense Software Inc, Burlington, Massachusetts, says it will offer a version of its application management software specifically to monitor the level of service ASPs provide to customers. Prices starts at $25,000 from next quarter.