ASPs Face Large-Account Hurdles

It seems to depend on who is asked. According to some analysts, big firms will not touch the hosted-application model. Still, ASPs are finding a place in large accounts.

Take Agilera.com Inc., a new joint venture by Ciber Inc. and Verio Inc. The ASP is hosting Lawson Software's HR/Payroll in 900 locations for Heilig-Meyers Co., a $2- billion furniture retailer based in Richmond, Va., said Robert Unger, president of Agilera, Englewood, Colo.

The key to approaching clients that have established IT infrastructures appears to lie in pitching services that fill in gaps in their back-office systems and alleviating the pain of introducing new applications.

In the case of Heilig-Meyers, the retailer had Lawson Financials in-house, but its payroll functions were handled by a third-party payroll provider, a relationship it wanted to end. By outsourcing to Agilera, Heilig-Meyers did not have to invest in more resources and knew it could add more Lawson applications over time.

But based on a recent study by Forrester Research Inc., Cambridge, Mass., large companies generally are giving ASPs the cold shoulder. Of 28 large companies surveyed, 71 percent do not outsource any applications either because they already have the applications they need, they do not believe outsourcing is cost-effective, or they have the necessary skills in-house.

The same survey showed that 65 percent of large companies are not even considering outsourcing applications in the near future.

However, Katy Ring, an analyst at London-based Ovum, said large firms are citing the benefits of not having to deal with standardization and mass software upgrades under the hosted-application model.- CRN

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