What goes around - timesharing is back in style

OUTSOURCING

Platform shoes have teetered back onto the fashion scene. Will nehru collar shirts be next? The passage of sufficient time makes everything old seem new again. Outsourcing is no exception to the rule. The business of offering timesharing services on a remote computer is back in vogue. Of course describing a business model for the new millennium with a term like timesharing would be so '60s. Accordingly, its proponents have concocted a new acronym: ASP, meaning Application Service Provider. An ASP business model offers computer system timesharing to users over the Web.

ISPs (Internet Service Providers) offering Internet connectivity have become commonplace. Consolidation is making small ISPs an endangered species. To survive, they are scrambling to transform themselves into ASPs that offer users access to software functionality in addition to basic Internet connectivity. The cost for that functionality is typically usage or transaction-based charges. The benefit is avoiding initial capital expenditures or delay. To get started, users simply connect to the Internet using a browser.

Some ASPs plan to offer a free software utility. An example of this approach is the StarPortal office productivity software service concept offered by Sun Microsystems. Currently the StarOffice suite containing word processing, spreadsheet, presentation, database and scheduling software can be downloaded for free and installed on your local computer. Eventually access to the StarPortal software utility offering the same functionality will be available over the Web.

Powerful ASP solutions for government service delivery have begun to appear. For example, consider municipal governments that need to schedule bookings and payment for facilities such as swimming pools and hockey arenas together with associated courses and program services. An existing ASP service provides municipal governments with an immediately functional online booking and payment system. A connection to the Web is all that is required for the system to be administered by the government agency and accessed by the public. Members of the public can go online to determine when a hockey arena is available, or where a figure skating class is offered, and then immediately book it and make a secure electronic payment with a credit card.

The government agency pays a small transaction fee to the ASP, and that cost can be easily factored into the fee charged to the user. This functionality is available today from a Canadian company called Reg-iNet. Check out the demo on their Web site at www.reginet.com. The possibilities for extending this cost effective service delivery model throughout the public sector are huge.

The future for ASP outsourcing looks promising. You will no longer be the customer of a software supplier. The ASP will be the customer of the software supplier and the ASP will make a functional software utility available to you. System installation, integration, upgrade and support aggravations will be a figment of the past. The frustration of budgeting for major capital expenditures on IT initiatives will be replaced with a fast track, pay as you go approach. However, issues surrounding the external custody of data by ASPs will become increasingly important concerns.

It just goes to show that if you wait long enough technology, like fashion, eventually comes around and presents an opportunity to make a cost effective leapfrog over the masses and back into style.

By David M. Robinson

David M. Robinson, LLB, is executive director of The TechKnowledley Group, advisors on negotiating and documenting complex IT transactions. Tel: 800-973-3833, E-mail: info@tkygroup.com.

Copyright Plesman Publications Ltd. Mar 2000
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