Big players wary of using ASPs

Big firms won't use application service providers (ASPs) for key tasks because of integration and availability problems.

Management consultancy and researcher the Concours Group interviewed chief information officers at leading blue chip companies in Europe and the US, and found that firms are reluctant to use ASPs for anything more than niche tasks.

"Some companies are taking large applications, such as customer relationship management (CRM) and human resources (HR) and putting those on ASPs," said Ed Roche, systems management consultant at the Concours Group.

"But I have yet to find a company that is willing to take a core IT process and put it on an ASP. They just can't do it in terms of risk of failure and the uncertainties involved with the model," he added.

Oracle and PeopleSoft HR packages are proving popular ASP services, said Roche, but the scale of integrating systems with CRM is proving too large for many companies to go down that route.

"I'm frankly not convinced it is going to fly as easily as HR. The CRM processes are so intimately connected with the information inside the company, it's difficult to imagine how the integration will take place," Roche said.

"What if one side or the other decides to go to a new version of the software. Who pays for it and how do you do troubleshooting? Typically, companies risk underestimating the cost of integration," he explained.

The public internet infrastructure is not yet robust enough to support a mass adoption of ASPs and guarantee availability for their users, said Roche, but improvements in optical and high-bandwidth switches is slowly changing this.