Why buy software when you can rent?
Summary Description 5 Minute Guides presents an overview of application service providers (ASPs).
Author

Publication

Roullas Top10 Simon Vandore

Newswire
No


Editorial InformationArticle Location http://www.newswire.com.au/0002/minuteg.htm
Article Topic 5 Minute Guides
Story Order
Story Group
Post Date 23/02/2000 04:25 PM Status Posted Entered by Simon Vandore on 22/02/2000 06:44 PM


ImagesLead Picture


Heading Image
<img src="http://apcmag.com/newswire/images/stock/nw_2fivemins.gif">



Content
Introduction


Body
What's all this hissing about ASPs?
Whenever you buy a piece of software (an application) to install on a computer, you get a licence to use that software for as long as you see fit. The application resides on your computer and if you want the latest version, you must buy an upgrade package or download an update. If you need more software, you have to go out and buy it.
But a new method of software distribution is emerging. Instead of buying and installing all the applications you want, you simply rent access to them over a telephone line or the Internet. The supplier is known as an application service provider (ASP).
How does it work?
An ASP does for software users what an Internet service provider (ISP) does for Net users.
Most computer users today have modems, and most companies have a decent Internet connection. Using one of those to connect to an ASP, users gain remote access to the software it offers -- anything from Microsoft Office to heavy-duty financial packages like Peoplesoft. Very little is actually stored on the user's machine and the server does all the processing, while minimal information crosses the connection between the two. The client machine is kept updated with visual information and sends the user's keyboard and mouse input to the server, while the server takes care of everything else.
To offer software remotely, an ASP needs to choose a method for users to access the software and stock up on powerful servers. This might be anything from an IBM mid-range system to a 'farm' of beefy Windows NT servers all running Citrix MetaFrame and treating the users' machines as thin clients.
Users are charged by time or volume of usage, rather than buying a licence for the application themselves.
Why rent when you can buy?
Instead of paying through the nose for software licences and perhaps purchasing an application they will later discard, ASP users can experiment a little and only pay for what they use. They potentially gain instant access to a wider range of applications than they could afford themselves. In the long run it is quite possible that renting will cost more than buying licences, but by outsourcing the burdens of maintenance and support to the ASP, users save money elsewhere.
The ASP takes on the burden of setting up the software, keeping it up-to-date and dealing with all the niggles that either the user or an IT department previously handled.
What's in it for software companies?
Perhaps software companies will become ASPs themselves, leasing access to their products over the Internet, eliminating the distribution channel and potentially earning more in the long run than they would by shipping shrink-wrapped products with up-front licences. Some companies, such as Microsoft with its new Office Online, have produced versions of their software designed specifically for remote use. Citrix has even developed a technology called Nfuse, which allows any Windows application to be used remotely through a Web browser (Microsoft Word operating inside a Netscape window, for example).
Or we might see large ASPs evolve (perhaps from the ranks of today's ISPs), vying for software companies' business and running huge server farms with tens of thousands of users. There are plenty of pure ASP companies starting up in Australia and overseas -- many are concentrating on heavy-duty financial packages targeted at big companies, but the first consumer-level ASPs are scheduled to go live this year.
On the other hand, maybe the software world isn't ready for such drastic change. If users decide they want to retain full control over their installed applications instead of paying by the minute for access, it could be a long time before cardboard boxes and hefty manuals disappear from computer shop shelves.


Related MaterialsRelated Articles


Related Links




Bulletin Summary5 Minute Guide: Why buy software when you can rent?

WAP Summary

Cross-Publishing InformationShort Headline
5 Minute Guide: ASPs

Clipping Information

Corporate IT No This field should be marked 'Yes' for any story of interest to corporate readers
CIT Lead No Newswire Lead No Section Lead No (These fields are controlled by all those handy buttons and agents)