The ASP… How, What and Why
by Joseph Scotti, AUDITEL, Inc.

As we move into the 21^st century, a new book will be written on acronyms in the telecommunications and technology industries. In this article, I would like to discuss what will become one of the more noted ones, the ASP or Applications Service Provider.

There are several definitions and interpretations of the Applications Service Provider (ASP). The most common term, until recently, is a company that offers individuals or enterprises access over the Internet to application programs and related services that would otherwise have to be located in their own personal or enterprise computers. Sometimes referred to as "apps-on-tap," ASP services are expected to become an important alternative, especially for smaller companies with low budgets for information technology. Early applications tend to be generalized and include:

Remote access serving for the users of an enterprise
An off-premises local area network (LAN) to which mobile users can be connected, with a common file server
Specialized applications that would be expensive to install and maintain within your own company or on your own computer

These ASP’s use the Internet as a foundation for their services. They may bundle Internet access, servers, associated software and support to provide this turnkey solution.

Recently, the telecom industry has been jumping on the bandwagon of the ASP. Much of the emphasis of the "telecom" ASP is attributable from drastic changes in the industry in the last twenty years.

As an example, prior to 1984, a single vendor, AT&T, provided all your telecommunications services. Today, we have hundreds, if not thousands of vendors providing telecom hardware (voice, data, video), local telephone services, long distance services, calling card services and this list goes on and on. When the 1996 Telecommunications Act became law, this drove the problem from being complex to very complex and frustrating.

As a private carrier, building owner, property manager and business owner you must now deal with multiple vendors and manage multiple vendor relationships. Leaving out the fact, that each service provider and vendor that you deal with in telecom and technology will bill you!

But help may be on the way. Let’s look at some examples of an ASP and how they may bring value to your organization and ease some pain. I tend to categorize the ASP business into IT (Information Technology) and Telecom. We are going to focus on the Telecom ASP.

First, think of the ASP as an integrator, a general contractor, someone who gets paid to pull everything together and make it work.

The first ASP I am going to discuss is the Voice-ASP. This type of ASP is fairly new. This application of an ASP is to provide you with a "turnkey" telecommunications solution that will allow you to effectively transmit voice calls of the Public Switched Network.

The Voice-ASP will provide you with the phone system (rented, leased or purchased), local phone lines, long distance services and a single billing solution. As you review this ASP, think about what has been eliminated from the equation. First, the local phone company and dealing with them; second, the long distance company and dealing with them; and third and probably most important, one bill and one call does it all.

When considering a Voice-ASP, (by the way, they are few and far between right now, but that is changing) look at the total cost of the solutions vs. the individual costs associated with your current environment. In some cases, it is difficult to justify the costs associated with a Voice-ASP because some of the potential savings is coming from "soft dollars;" your time. You have eliminated at least two vendors from the equation, the local phone company and the long distance company. Two less people to talk to, two less bills to understand and pay. It is sometimes difficult putting a cost savings on this.

The Video-ASP is somewhat similar in nature. This ASP provides videoconferencing solutions, but in a "turnkey" approach. They will provide the videoconferencing equipment, assist in the design of the "video room," provide any additional multi-media peripherals, coordinate and oversee the installation of the digital phone lines, provide training and ongoing support.

These are the two most popular ASPs in the Telecom market today. But as you know, Telecom is a very broad term today. Some additional examples of ASPs are:

Vertical Market ASPs such as Health, Education, Military
Email-ASPs
WEB-ASPs

The Email-ASP is becoming popular with ISPs and customers alike. Email, for the most part resides on in-house servers, but that is changing. Centralizing email with your ISP is becoming more popular and in some cases cost-effective. Large and small companies are beginning to migrate from the managed, in-house email application over to the ISP’s solutions.

In summary, you will be hearing lots about the ASP in the coming months and years. With outsourcing growing in popularity, companies are now considering the ASP as a viable alternative to "keeping the application in house" or using a multi-vendor solution.

You know it must be growing in popularity, because some entrepreneur has created a website, http://www.searchasp.com. This is an excellent website for research on the various ASPs.

About the author

Jospeh Scotti is President & CEO of AudiTel, Inc. AudiTel specializes in the design and integration of voice, video and data systems for multihousing, municipalities, health care facilities and other institutions. The author may be reached via email at joe.scotti@auditel.com