Wireless ASPs: A Needs Assessment

Jun 4, 2001

Guest Author

By Lain Chroust Ehmann

The advantages of giving a mobile workforce seamless, any time, anywhere access to corporate data are obvious. What's less clear is how companies - especially smaller ones - can deploy wireless data systems in a timely, cost-conscious manner.

If you're a large Global 2000 company, you have virtually limitless options. These range from creating a custom application in-house, to hiring an outside consultancy to design one for you. But what if you can't afford the $250,000 for an in-house, custom wireless solution? That is actually just a starting point for what it could cost your company, according to Andy Fox, chairman of iConverse, a Waltham, Mass.-based mobile platform provider. In that case, your best bet may be a wireless application service provider (WASP).

What's a WASP?

WASPs rent rather than sell software. This allows companies to access their main systems - e-mail, financials, manufacturing, customer relationship management (CRM), enterprise resource planning (ERP), etc. - wirelessly. WASPs host the rented or leased applications offsite. This is done through their own secure servers. Theoretically this means that customers save money on internal IT staffing and other resources, says Pyramid Research analyst Joseph Braude.

WASP customers have the added convenience of a "one-stop shop, from womb to tomb," says Ravi Kulasekaran, CEO of Fremont, Calif.'s AppShop, the world's largest Oracle ASP.

WASPs also offer predictable costs. Plus guaranteed service quality and quick time to market, adds Kulasekaran. He says AppShop's basic data access wireless solutions, currently being rolled out, will cost in the range of $50 to $100 per user, per month.

Because of its upside, the ASP model has been a popular one in recent years. It's no surprise, then, that resourceful software companies large and small are leaping into the wireless arena using the ASP model as a parachute for a soft landing. In fact, so many WASPs are vying for the chance to take your company mobile that analysts can't keep track of them.

But, as many in the wired world discovered as their ASP partners joined the dot-com body count, the best time to evaluate your potential service provider is before you sign on the dotted line.

Exercising Due Diligence

WASPs bring several potential disadvantages along with their numerous pluses. First and foremost is the loss of control that can come hand-in-hand with outsourcing. iConverse's Fox says their larger customers tend to prefer in-house solutions. This allows them to make rapid changes to their applications and to leverage their existing IT investments. Companies are also concerned about the security issues involved in taking mission-critical applications outside the enterprise, says analyst Braude.

But just like with marriage, the success of the relationship largely depends on choosing the right partner. Many companies run into trouble by "picking the wrong ASP and finding themselves in the position where their business is getting compromised," says AppShop's Kulasekaran. The way to sidestep many of these issues is by checking out potential service providers ahead of time.

In addition to basic queries about pricing, security processes, references, and the financial stability of the company, also ask, "What happens if I don't like you?" says Kulasekaran. He adds this because if things do go wrong, you should be able to reclaim the application and take it in-house. Also ask for a workable service level agreement (SLA) delineating minimum system uptime, and a clear upgrade path as well, he recommends. If the answers aren't satisfactory, move along.

WASPs present a viable option for taking your company wireless. The model isn't for everyone, though. The concerns about outsourcing may outweigh the numerous benefits. But if you need an easy-to-deploy, low-cost solution, take a good look. If you ask the right questions, you'll find it is possible to get close to a WASP - without getting stung.


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