Trend toward ASP model could have network equipment vendors worried

It’s an example of a frightening yet all-too-familiar scenario that many network managers must confront on a regular basis: a printer in your company’s Human Resources department goes kaput; the vice-president of sales is hollering for a new line of laptops for his staff; your voice mail is flooded with requests from employees who have technical difficulties that could be fixed by a nine year old; your firm’s intranet is down and you can’t figure out why. And you haven’t even got your first coffee of the day.

No matter how frazzled you get, however, no matter how many hours you end up staying past five o’clock, no matter how cold your coffee gets, you and your IS staff manage to get everything fixed before packing up and heading home. Hey, you have to – there’s no other choice.

Because there is no other choice, perhaps some corners end up getting cut. Perhaps you don’t research the laptop market as extensively as you would like to; perhaps you don’t fix everything on that malfunctioning intranet that can be fixed. Even though such shortcuts might not bode well for the corporate bottom line, your boss forgives you because, after a multi-hour meeting spent pleading your case, he understands that you’re over-taxed. You leave his office and go back to yours, and things continue in this unending, unforgiving cycle.

For as long as corporations have been using technology, this cycle has been revolving as surely and steadily as the Earth’s rain cycle. Fortunately, a recent development could bring a halt to this IS downpour: the Application Service Provider model.

While over the past year the practice of handing over elements of an IT infrastructure to a third party is one that has caught on like a match on gasoline, the implications of what this model will mean to the traditional IS department are just starting to sink in. Like all new technology shifts, some promises will not pan out in the long run. In the case of the ASP shift, though, it seems clear that one potential benefit for the network managers is a can’t-miss: the need for greater accountability on the part of vendors.

With ASPs making it their business to know a technology inside-out, and to get the best deal on that technology for the companies that are employing them, vendor products could very well come under more intense levels of scrutiny than ever before. No longer will manufacturers of everything from mice to mainframes have the luxury of selling their wares to ill-informed purchasers.

Instead, ASPs, even if they do a half-buttocked job of looking out for the best technology for their clients, will have the time to do what internal IS staffers often did not: scrutinize markets. Where the typical manager would have to turn away from his research on the laptop market to tend to an improperly shutting-down PC, ASPs will (in theory) have the time to do that research.

Even if the theory does not fully become reality, one has to wonder what vendors are making of this trend toward ASPs. The ASPs that eventually form the elite of their market will put more pressure on the manufacturers of printers, PCs, wireless devices, and whatever other network elements that firms are starting to outsource in droves. Equipped with more time, and hence, more knowledge of technologies, ASPs will be able to ask more of vendors, to play them off against each another and, as a result, attain a better return on investment for their customers.

That’s the theory, anyway. We’ll have to wait to see how much reality it contains.