Application service provider (ASP):
Traditionally, software applications such as office suites are
sold as packages that are installed and reside on the user’s
computer. Starting in the mid-1990s, however, the idea of
offering users access to software from a central repository
attracted considerable interest. An application service pro-
vider (ASP) essentially rents access to software.
Renting software rather than purchasing it outright has
several advantages. Since the software resides on the pro-
vider’s server, there is no need to update numerous desktop
installations every time a new version of the software (or a
“patch” to fix some problem) is released. The need to ship
physical CDs or DVDs is also eliminated, as is the risk of
software piracy (unauthorized copying). Users may be able
to more efficiently budget their software expenses, since
they will not have to come up with large periodic expenses
for upgrades. The software provider, in turn, also receives a
steady income stream rather than “surges” around the time
of each new software release.
For traditional software manufacturers, the main con-
cern is determining whether the revenue obtained by pro-
viding its software as a service (directly or through a third
party) is greater than what would have been obtained by
selling the software to the same market. (It is also possible
to take a hybrid approach, where software is still sold, but
users are offered additional features online. Microsoft has
experimented with this approach with its Microsoft Office
Live and other products.)
Renting software also has potential disadvantages. The
user is dependent on the reliability of the provider’s servers
and networking facilities. If the provider’s service is down,
then the user’s work flow and even access to critical data
may be interrupted. Further, sensitive data that resides on a
provider’s system may be at risk from hackers or industrial
spies. Finally, the user may not have as much control over
the deployment and integration of software as would be
provided by outright purchase.
The ASP market was a hot topic in the late 1990s, and
some pundits predicted that the ASP model would eventu-
ally supplant the traditional retail channel for mainstream
software. This did not happen, and more than a thousand
ASPs were among the casualties of the “dot-com crash” of
the early 2000s. However, ASP activity has been steadier if
less spectacular in niche markets, where it offers more eco-
nomical access to expensive specialized software for appli-
cations such as customer relationship management, supply
chain management, and e-commerce related services—for
example, Salesforce.com. The growing importance of such
“software as a service” business models can be seen in
recent offerings from traditional software companies such
as SAS. By 2004, worldwide spending for “on demand”
software had exceeded $4 billion, and Gartner Research
has predicted that in the second half of the decade about
a third of all software will be obtained as a service rather
than purchased.
Web-Based Applications and Free Software
By that time a new type of application service provider
had become increasingly important. Rather than seeking
to gain revenue by selling online access to software, this
new kind of ASP provides the software for free. A striking
example is Google Pack, a free software suite offered by the
search giant
. Google Pack includes a variety
of applications, including a photo organizer and search and
mapping tools developed by Google, as well as third-party
programs such as the Mozilla Firefox Web browser, Real-
Player media player, the Skype Internet phone service,and antivirus and antispyware programs. The soft-
ware is integrated into the user’s Windows desktop, pro-
viding fast index and retrieval of files from the hard drive.
(Critics have raised concerns about the potential violation
of privacy or misuse of data, especially with regard to a
“share across computers” feature that stores data about user
files on Google’s servers.) America Online has also begun to
provide free access to software that was formerly available
only to paid subscribers.
This use of free software as a way to attract users to
advertising-based sites and services could pose a major
threat to companies such as Microsoft that rely on software
as their main source of revenue. In 2006 Google unveiled
a Google Docs & Spreadsheets, a program that allows
users to create and share word-processing documents and
spreadsheets over the Web. Such offerings, together with
free open-source software such as Open Office.org, may
force traditional software companies to find a new model
for their own offerings.
Microsoft in turn has launched Office Live, a service
designed to provide small offices with a Web presence and
productivity tools. The free “basic” level of the service is
advertising supported, and expanded versions are available
for a modest monthly fee. The program also has features
that are integrated with Office 2007, thus suggesting an
attempt to use free or low-cost online services to add value
to the existing stand-alone product line.
By 2008 the term cloud computing had become a popular
way to describe software provided from a central Internet
site that could be accessed by the user through any form
of computer and connection. An advantage touted for this
approach is that the user need not be concerned with where
data is stored or the need to make backups, which are
handled seamlessly.
See also:
application-program-interface-api
0 comments:
Post a Comment