Software as Service

Software Magazine, Dec, 1999 by Dan Kara

Other software issues are no less prickly. Consider the issue of customizations. ASPs typically limit the degree to which the systems can be customized or integrated with existing systems. This is understandable given that ASPs must target the broadest market segments and simply cannot support every combination and permutation of feature sets for each of their customers. Many ASPs flatly refuse customizations outside certain parameters. Users must judge whether the advantages of the hosting approach outweigh the benefits of customized back-office systems.

Architecture and networking services are the other major piece of core support provided by ASPs. At this time, hosting providers differ radically as to the manner and degree in which they support the basic infrastructural elements required to adequately support a hosting solution. For example, some ASPs offer a variety of network options, including Internet, extranet, VPNs, or frame relay and ATM-based VANs. Similarly, some ASPs offer a variety of hosting server options. Some ASPs provide a dedicated server for each of their customers, while others support only shared servers. Still others will support co-located servers where customers can physically place their own server within the ASP server farm.

Application hosting vendors can also be differentiated on the basis of the types of hardware and systems software they will support. In a manner similar to limited customizations, application hosting vendors will often limit the number of architectural options available to their customers in order to reduce the number of platform types they must manage. A limitation on supported back-end runtime architectures could have major implications in terms of performance, ongoing support, and overall costs. For example, Windows NT could be much cheaper than a high-end Unix box, but their respective execution attributes could differ significantly.

Basically, all hosting providers offer regular backups and disaster recovery services. Many also provide redundant nodes with load balancing and server failover support. A few vendors also offer load balancing across different geographic locations. Naturally, this assumes multiple hosting centers. Of course, the degree to which resource redundancy and load balancing are supported is predicated on both the hardware/OS combinations available and the packages that are being used (the same is true of state and session management).

Value-Added Services

As I noted above, the real story behind the application hosting movement is the motion of software as a service. To date, most ASPs have differentiated themselves based on the core services they provide. But already the leading ASP vendors, along with smaller solution providers seeking an exploitable market niche, are developing new classes of services that include some type of hosted application. Localization services, collaboration capabilities, Webcasting/push services, electronic billing, procurement, and Internet-based conferencing and Web seminars provide but a few examples. Some ASPs are releasing more verticalized applications, while others are focusing on custom development and integration services.