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The Insiders Guide To Selecting The Right ASP
To Reap The Full Benefits Of ASP Hosting
Greg Gianforte, Founder and CEO, RightNow Technologies
www.rightnow.com
This article is exclusively written for G-CEM.
There are obvious reasons for the current resurgence in the use of application service providers (ASPs):
? Lower application ownership costs ? ASP-hosted applications can reduce lifecycle application ownership costs by 50 per cent or more by eliminating the need to purchase and manage server hardware, operating systems, databases, storage capacity and other supporting infrastructure.
? Faster time-to-benefit ? by accelerating software implementation through eliminating the need to install, configure and integrate the software.
? Reduced risk ? piloting the application prior to purchasing minimises the risk typically associated with technology investments.
? Relationship control ? by offering fixed-term contracts, buyers have greater control over their relationships with ASPs than conventional software licensing contracts.
12 Criteria
Because of the growing corporate interest in the ASP model, many software vendors are positioning themselves as hosted software services providers. However, not all vendors are true ASPs. To reap the full benefits of ASP hosting, technology buyers must be sure that vendors adhere to the following 12 criteria:
1. Functional match with business requirements. It is critical that ASPs meet your functional requirements. If you require a CRM solution that provides integrated incident management across its call centre, email and chat channels, then it?s critical that the ASP?s offering fulfils that requirement.
2. Browser access to all application administration functions. The ASP must give you the power to perform administrative functions on your own. The aim of using an ASP is to keep costs low and to make you self-sufficient - not dependent on the ASP.
3. Integration with existing in-house applications. Linking your ASP?s application with your existing applications is crucial. Be sure the ASP has customer references that have actually completed integrations like the ones you might undertake.
4. Service Level Agreements (SLAs). SLAs generally include availability objectives or guarantees ranging from 99 percent (low) to 99.97 (high). Potential buyers should look beyond these numbers and ask ASPs questions such as the following:
? What is the ASP?s track record for meeting these objectives for companies your size?
? Has the vendor had any extended outages in the prior year?
? Will I be notified in advance of any scheduled maintenance downtime that will affect my application?
? Application performance is just as important as availability. What are the ASP?s performance objectives and track record with businesses of a similar size?
5. Application availability and performance monitoring. Availability and performance monitoring systems ensure ASPs comply with SLAs. You should expect the ASP to provide a Web portal that shows the performance of your application. This portal should include overall uptime information and graphs, showing minute-by-minute performance for any time period you specify. Ideally, the data should be available in real-time so businesses can act immediately on problems if and when they occur.
6. Ability to easily upgrade and customise. Be sure to discuss how your ASP application will be upgraded. Some ASPs upgrade all their customers at once. Clearly this is not ideal, because you need to perform the upgrade at a time that?s convenient for you. You may even want to skip some upgrades, so be sure that your ASP gives you this option too.
It is also important to consider the ability to customise your individual application. This is extremely important as ASPs offering applications not originally designed for ASP delivery may only be able to offer very limited customisation. But an application that is truly built for ?multi-tenancy? hosting will.
7. Reporting/analytics capabilities. Management reporting gives you critical insight into your business operations. To ensure that you can meet present and future needs, look for three key things:
a. A robust set of ?canned reports? that can run without requiring customisation ? addressing more than 80 per cent or more of your reporting needs
b. The ability to design your own reports within the application without the need for third party tools
c. The ability to use a third party report writer or business intelligence tool over a secure real-time remote connection to the data at the ASP. Such a connection allows for real-time reporting with your company?s standard reporting or BI tool of choice.
8. Security. Your ASP will store sensitive corporate information. Security is therefore very important. Ask your ASP the following questions:
a. Describe the physical security and disaster recovery/prevention features of the ASP?s data centre
b. Who (including employees, data centre staff and vendors) has physical access to the hosted servers?
c. Are industry-standard firewalls deployed?
d. What protocols and ports are allowed to traverse the network/firewall?
e. Does the ASP use intrusion detection systems?
f. Are formal incident response procedures in place?
g. What change management procedures are in place?
h. Describe the user account and password policy. How are user accounts closed after termination?
i. Are hosting staff available anytime?
9. Hosting as primary delivery method. Make sure that the vendor you are working with values hosting as the primary delivery method. Many vendors have added hosting as an afterthought, with some even using third parties to run their hosting businesses. Vendors that have added hosting as an ancillary service in this way are prone to discontinue their hosting services with little warning. Be sure to ask:
a. What percentage of the vendor?s customers are hosted?
b. Does the ASP have other hosting customers in my industry? Can I speak to them?
c. Does the ASP manage the servers and the application, or just the application?
10. Bringing the application in-house. It is important to have the security of knowing that you can bring the application in-house if need be. This option removes the risk associated with ASP failure, its acquisition by another company or a change in your own company?s business or IT strategy. Ask for references from customers running the application in-house. If there aren?t any, the likelihood of you being able to do this successfully is probably slim.
11. Retaining data if the relationship is terminated. The likelihood that you will have to eventually migrate to another platform is high. Be sure you can get your data in a standard format that will easily migrate to another system.
12. Financial stability of the ASP. While today?s successful ASPs are thriving, the fact remains that many have failed in the past. You will reduce your risk significantly by selecting an ASP that has a demonstrable track record of growth and positive cash flow.
ASPs are changing the way corporations buy and use CRM and other enterprise applications. However, it?s critical to select the right one. The best ASPs are those that are fully committed to the ASP model, provide comprehensive browser-based application functionality, provide robust security and offer appropriate business engagement terms. By selecting ASPs based on the criteria outlined above, organisations of all kinds can benefit from the fast deployment, lower operating costs and reduced management headaches that hosted applications offer.
About The Author
Greg's work at RightNow builds on 15 years of success in the computer/Internet industry, including 11 years with Brightwork Development and McAfee Associates. Greg founded Brightwork, a developer of network management applications, in 1986. With 75 employees and software installed on more than 150,000 Novell systems nationwide, Greg sold the company to McAfee Associates in 1994. Retained by McAfee, he grew the company's North American sales operation from $25 million in revenues to more than $60 million in under a year. During Greg's tenure, McAfee was selected by Fortune Magazine ? based primarily on its Internet selling approach ? as one of the "10 Coolest Companies in America." Greg holds a BE in electrical engineering and an MS in computer science from Stevens Institute of Technology.
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