Is app hosting the future or fantasy?

At Networld+Interop an entire track is dedicated to hosted applications. But can ASPs deliver?

The rush for software companies to distance themselves from their shrink-wrapped pasts and reposition as applications service providers (ASPs) seems to have died down in recent weeks.

It's not because the money's not there. Analysts continue to raise their skyrocketing predictions for the ASP market on a weekly basis. And next to B2B, ASP still remains the acronym with the most venture funding appeal.

Instead, the bloom may be (slightly) off the ASP rose because software companies have started to listen to the largely dissatisfied customer base who've been on the bleeding edge of trying to run hosted applications. It will be interesting to see whether ASPs rein in their promises this week at the Networld+Interop trade show in Las Vegas, where an entire track is dedicated to ASP Networks. Hosting sounds glitzy when you rechristen it "software as a service," rather than "timesharing revisited." Ask Microsoft, which, after two years of vaporware promises, is expected to make application hosting a cornerstone of its forthcoming Next Generation Windows Services (NGWS) strategy, due out in June.

But just how realistic is it to run Office or Exchange Server or SAP's R/3 over the Internet? Because of the dearth of ubiquitous broadband pipes, not very.

My Sm@rt Reseller colleague Steven J. Vaughan-Nichols penned a recent account of SR's attempt to run its Notes mail in a hosted configuration. The results, as Vaughan-Nichols so aptly expresses: The ASP market is a bit like Disney World. "You start off starry-eyed, but sooner or later, you have to leave Fantasyland," he says.

SR found out the hard way that Notes' Java-based client should not be used in an ASP environment. Period. The folks over at PCWeek add their own caveats: With hosting, expect all the headaches you'd thought you'd left behind in the good old multi-vendor melting pot days. Only now, you've got to manage multiple ASP service contracts from multiple vendors who are likely to provide multiple levels of performance.

If the Department of Justice and state attorneys general suing Microsoft have their way, Microsoft customers may never find out whether hosted Office or hosted Exchange offer real bang for the buck. The DOJ's remedy proposal announced at the end of April called for Microsoft to be curtailed severely when it comes to integrating middleware (which, under the DOJ's definition, includes everything from Exchange, to Internet Information Server to streaming media) into its operating systems going forward.

If you look at Microsoft's central repository for all things hosting-related, integration is key to its ASP vision. It can't progress beyond its various pilots in the hosted Office, Commerce Server, streaming media, knowledge management and/or business applications arenas unless the company rewrites its business plans in a major way. But such restrictions might not be such a bad thing, at least if you put faith in early customer feedback.

What's your take? Is there still a future for hosted applications? Or will fat clients, fat servers and those familiar three-tier architectures have their day, yet again? Talk back below and let me know.


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