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ASP model

ASP solution

One of the strong trends of current world of communication and information technologies is the advancement from selling products to prividing services. It is related to various applications, which are not selled a ran by the company, but it is only used and the maintanance and the run is up to the Application Services Provider (ASP).

ASP model becomes extremely popular because of the value it brings. This value can be recognized in costs reduction(approx. 30-50% while the functioning is kept), it solves the global problem with deficiency of IT specialists and not least it enables the shortening of period for implementation of new systems.

Lot of applications is being used for work now, from universal office packages through more specialised apps like storage management, accounting to really specialised apps like TV broadcast production etc.The traditional style of running such application is based on ownership of them. This means to buy it and run it on own computers, own computer network with own data and also with own administration and maintanace, care of updates etc. The costs for running such applications has two basic components - uniphase component which is equal to costs of purchasing (and also the training of users) and running costs which consist from the cost for administration, maintanance, aktualization, archiving etc.

Various subjects who run or tend to run several applications are interested of volume of costs for running them. The purchasing costs might be too high for smaller companies - such subject can hardly purchase or develope specific application, which it needs and is only able to purchase some universal office package, which does not fit that much to its needs.For bigger company with more employees the purchase does not have to unavailable but both companies meet the second component of the price consisting from running costs (this is often called the "cost of ownership"). Many studies and statistics reveal that this part is more problematic for lot of companies then the purchase costs.

All the interested companies are naturally concerning themseleves how to reduce the both components of costs and how to optimalise their total costs for running the necessary applications they need. This intertest led to launching several trends, which lead to a single consequential trend - to providing application services, which are the subject of this article.

The ASP concept

The ASP is in short a supply model, where the accepter solves his needs of automation of his processes through renting the application as a service from the ASP operator. The service is usually payed and the transfer media is the data network, mostly in forms of Internet services.

Typical representatives of the ASP application are the repeatedly aplicable packaged solutions, not unique made-to-measure applications. The supplier does not rent the end devices infrastructure (PCs,LAN) nor the data transfer services as it is in classic outsourcing.

ASP benefits

The key factor for every business strategy lays in the knowledge of the value generated by the products of the strategy. Although we do not have enough space for detailed presentation of all direct and indirect benefits, a short summary is useful indeed:

The basic activator of the expansion of the ASP market is the cost reduction for purchasing, production and development of company applications. According to concurent studies more then 60% of total costs are composed from key applications support. The estimated reduction by using the appropriate ASP or outsourcing model can reach 50%(GartnerGroup). But the benefits can not be reduced to financial aspects only. The main points split into financial and material are introduced below.

The main material benefits:

• Possibility of concentration on the main target activities - The internal resources can concentrate on most important business tasks instead of exigent projects of inovation of the information functions and optimize the company for the quickness of enviroment's changes.
• Shortening of implementation period - faster implementation of applications which enables the abbreviation of the system introduction.
• Access to the top technologies for reasonable price - The approach to the top aplications and the best IT services reduces the competition odds on market.
• Better rate of IT costs and IT gains - guaranteed level of effectivity and credibility which improves productivity
• Much more effective using of the professional IT experts - The experts are consistent that only massive developement of ASP and outsourcing can, at least partialy, solve the global problem of  IT specialists deficiency.
• Scaleability of the effort enabling the company's growth - Possibility of activities expanding without the need to wait for the IT infrastructure to be ready.

Financial advantages

• Elimination of investment costs - replacing the investment costs with operation costs.
• Total reduction of costs for application implementation - reduction of total costs for the application' s life cycle - for about 35-65% mostly due the standardisation and shortening of the implementation cycle.
• Higher quality of planning and better manageabilty of the information system's cost - quality planning and the knowledge of total costs is necessary for determination of information system's benefits, which is high priority task for the majority of IT

ASP as the supply model

"Internet globalisation" is the main engine of the ASP as the supply model a causes its fast and mass acceptation by the clients and suppliers as well, mostly in the USA. ASP model has and will have big impact on the structure of client-supplier relationships in the whole IT branch.

ASP solution has the ability to delivery large added value namely in the sense of cost reduction, when applications supplied by this form are mostly available for free and also other costs for their hiring are not that high compared with investment to HW and SW for operating summilar system inside the company. Big changes concerning the approach and understanding of ASP and outsourcing as reliable partner for operating company applications. The users must trust the supplier and the suppliers must deserve this trust.