Providers Uncover Different Approach to Software Access

May 2000
By Sharon Berry

Innovative application deployment may save end-users money and time to focus on core business objectives.

A new method of delivering software promises to reduce the cost and time required for infrastructure setup, software installation, maintenance and support. Known as the application service provider model, the approach reduces the burden on internal information systems resources and enables a predictable cost model for running programs.

The initial and recurring costs of providing applications can exceed $10,000 per user, according to The Tolly Group, a strategic consulting firm located in Manasquan, New Jersey. Client and server hardware account for less than 15 percent of this total. The remaining 85 percent includes network and communications infrastructure and the cost of application development, maintenance, upgrades and ongoing technical support. A considerable savings could be realized by deploying the same enterprises with the one-to-many application service provider (ASP) model. The model features both an infrastructure and software that are delivered across a wide area connection from one firm to multiple users. The one-to-many relationship produces the cost savings.

In today’s networked world, applications must be extended across various connectivity options, from low-speed dial-up to wireless, wide area networks and the Internet. The applications also must be accessed on a variety of computing devices, from legacy personal computers to Java network computers, UNIX machines, Macintosh and DOS-interface platforms. These devices increasingly can include wireless devices such as cellular telephones, palm computing devices and Internet appliances. With many variables, deployment becomes both more challenging and more expensive. Industry experts agree that ASPs can be a cost-effective solution to these challenges.

Chuck Moreland dispels a common misconception about application service provisioning. Moreland is the chief executive officer of Thinter.net, San Jose, California. “There are a lot of people out there who think that ASPs are about renting software, and they think it’s about reducing the price of a software application by renting it. That’s not what ASPs are about. It happens that ASP services are often delivered with a monthly subscription model, but it’s really about the ASP’s ability to provide infrastructure, management of that infrastructure, the information technology staff to administer it all, maintenance, data backup, upgrades, and the network capabilities that are delivered and are inherent in the ASP,” he explains.

Information technology outsourcing focuses on a single entry; the ASP focuses on many users. In outsourcing, a company takes what another business has, moves the technology to its data center, and manages it for the business. The capabilities can be accessed through a server, typically through a dedicated high-speed pipe from the outsourcing center directly to the business, with a focus on one customer and one need. ASP takes a broader approach where the providers have many customers who run the same applications and then share the applications among the users. When applications are shared, licenses, bandwidth and technical expertise also are shared, driving down cost and creating economies of scale, Moreland explains.

This application-hosting ecosystem comprises independent software vendors, application service providers and network service providers, resulting in a client-independent approach. The Citrix-designed independent computing architecture (ICA) is an example of this approach, which, according to The Tolly Group, yields the lowest cost of application ownership when compared with the traditional desktop computing model and the client-server or network computing model. Because the applications reside and execute on the server, the time and costs to install, configure and deploy applications to users are greatly reduced. Also, because only the graphical user interface of the application is distributed to the end-user, most devices can access sophisticated information.

A common perception that server-based computing drives up network usage costs is addressed in a study published by The Tolly Group. According to the report, the ICA technology is optimized for low-speed connections, such as at 14.4 kilobits per second, and only keystrokes, mouse movements and screen updates are distributed to the client. This makes cost-effective high performance possible—even for 32-bit applications—over lower-speed connections. The approach reduces network traffic and improves performance for wide area network, Internet-connected and remote dial-up end-users by as much as 10 times.

The ICA separates application logic from the user interface. On the client side, users see and work with the application’s interface, but 100 percent of the application is server executed. Using the ICA, applications consume as little as one-tenth of their normal network bandwidth. According to John Marchese, director, iBusiness Service Providers, Citrix Systems, Fort Lauderdale, Florida, terminal manufacturers have come to support this model. The protocol is included in the chip set and burned into the device. Today, 130 manufacturers are licensed to use the ICA with their hardware.

Marchese notes that the success of ASPs is growing. “Within the enterprise, we have been very successful, and our penetration rate is 99 percent of Fortune 100 companies and 80 percent of Fortune 500 firms. The ASP model is fairly pervasive and very well penetrated into small- and medium-sized businesses,” he reports.

Government agencies also have taken advantage of this computing model. The state of Florida Department of Highway Safety and Motor Vehicles (DHSMV) receives 18,000 title applications per day, representing 20 million documents yearly. The department performs title-application-related administrative duties with a staff of 48 full-time employees. The backlog had grown to 17 days, and document retrieval could take several weeks using a microfilm system.

The DHSMV’s request for proposal led to an application-hosting solution, CyLex express service, based on Citrix application server software. The system provides a centralized and secure document vault for storing and managing electronic images of paper files. The project also allows direct, online access to the vault from more than 200 local tax collection offices statewide. This access will enable users to view the millions of title applications filed each year, translating to a reduction in administrative time from several weeks to 15 seconds.

E-commerce firms also will reap the benefits from ASPs. A provider could deploy an application that searches the Internet for the lowest price on a particular item. An end-user with a wireless palm computer might see a television in a store and enter the bar code information into the application that is running on the device via an ASP. The application executes the search for the lowest price and immediately sends the user a list of prices and methods for purchasing the television over the Internet with one touch. “Right there, the ASP just extended an e-commerce opportunity to a consumer who may or may not have a PC but has some type of device that can use the ASP technology. We’re sending computing where it has never been before—beyond PCs,” Marchese observes.

According to Moreland, ASPs also are addressing vital business support functions such as security, archives, customer service, training and technical support. “Another area where we’re seeing the ASP can be leveraged to great advantage is the gathering of statistical data,” he points out. Statistics on how customers use applications and their preferred features can be collected. Software developers can then use this information to improve their products. Statistical information also can be used for creating usage-based billing capabilities so pricing models will be developed around the ASP.

“There are really two very different areas,” Moreland notes. “One is infrastructure, related to delivering and performing well across wide area connections and a shared model. The other is leveraging that delivery model to create new features and capabilities that simply weren’t practical or possible with traditionally delivered software mediums.”

In the arena of software training, many providers work through the software vendors. Suppliers offer the ASP-facilitated training using remote training tools that enable users to learn through locations across the Internet. Both the teacher and student have access to and manipulation of the application, so it seems as if the instructor and pupil were standing side by side. “It makes for a very rich training environment and saves a lot of time and money,” Moreland adds.

The ASP industry also promotes best practices. Handling redundancy issues is one of Thinter.net’s priorities. These include power redundancy, battery-backed and generator-backed power capabilities to tolerate failures, redundancy in power for every server supported, dual hot swap power supplies, and built-in redundancy in network architecture to allow for failure of individual server components without affecting the network, user operations or data. Moreland notes that not all ASPs follow these best practices, and the customer should evaluate the practices on a provider-by-provider basis.

Built-in security is another best practice. User authentication, information encryption, firewalls and information partitioning are a few examples. Policy-based security measures, such as restricting users from installing executable files in the ASP environment, are within the security realm as well.

Moreland emphasizes the full scope of application service provisioning. “It’s not about taking a one-time purchase of software and turning it into an amortized monthly statement. … It’s about the management infrastructure and network. The customer is getting much more than software,” he concludes.

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