Seeking Leadership in ASP Marketplace

The reasons that enterprises need to outsource are well-understood: a lack of specialized IT talent, time-to-market pressures, and the need for IT organizations to focus on business-critical, revenue-driving applications rather than strictly maintaining operations. But the marketplace of products and services that will make application and network outsourcing a reality, particularly for larger companies, is stuck in first gear.

After going public, a number of start-up ASPs (application service providers) are out of favor on Wall Street. A year and a half after the term ASP was coined, customers are still not sure which services are offered by which provider. And the technical hurdles keeping customers on the sidelines -- application integration and data security, to name only two -- remain unresolved.

Into the confusion step IT industry giants. Eager to position themselves for the shift to delivering software via the Internet -- and the predictable revenue stream it promises -- platform providers are building the foundation for this transition.

Our stories, led by Tom Sullivan and Ed Scannell, describes how the commitment of industry leaders will likely benefit businesses' ability to procure, develop, and integrate Web services.

But even as infrastructure is under development, most IT managers are still reluctant to hand over core business applications -- and for good reason. The business model and technology are still immature.

Ultimately, though, the logic of outsourcing is too strong. Whether IT managers like it or not, economics will force businesses into a deeper commitment to outsourcing.

To succeed, IT executives will pick the biggest bang for their buck: In other words, new applications. For example, a number of ASPs are offering outsourced links to business-to-business exchanges or specialized services such as network security. The sooner IT learns how to ride the wave of software services, the smoother the ride will be.

Is your organization willing and ready to outsource new applications?

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