ASPs don't make sense for large companies

If something is said often enough—no matter how weird it is—people start to believe it. This simple fact never ceases to amaze me.
Written by Pankaj Chowdhry, Contributor on

If something is said often enough—no matter how weird it is—people start to believe it. This simple fact never ceases to amaze me.

While at Comdex earlier this month, I actually debated the meaning of "ironic" while traveling in a cab. Unfortunately, my adversary had been schooled at the Alanis Morissette school of English and couldn't grasp the literal aspects of irony.

It's disturbing that an insipid pop star is teaching her fans English—badly. But it's truly tragic that we find ourselves in almost the same situation with most of the ASP market. I say "most" because ASPs make sense for small or midsize businesses that are not in the technology industry and can't achieve some of the economies of scale necessary to reduce their computing costs.

However, any practical use arguments are null and void when ASPs start pitching their wares to large enterprises. Imagine if Henry Ford had held the assumptions inherent in the ASP model. Suppose he'd believed that automobiles were complex pieces of machinery and that "users" were simply too stupid to drive cars effectively. For this reason, he would have sold a driver with every car and the "user" would have paid a monthly fee for said driver. And the users would have thanked him.

This might sound outlandish, but it is exactly the sort of rubbish that software vendors are trying to sell to enterprises.

Vendors from Microsoft to SAP have made their software so bloated and difficult to maintain that they are conceding that it's futile for a mere mortal to try to maintain it in any dynamic environment.

They will maintain in a glass house the software that only they can understand (they did write it, after all), and we, the willing users, will have to pay them for the privilege of using it.


Never mind the technical problems with the reliability—those snags can be figured out. Doesn't it disturb anyone that no one seems to be able to make an application as simple as a word processor that can be maintained by a typical user?

Often, economies of scale are cited as a way costs are reduced by using an ASP. The unfortunate part of this argument is that it often is true, simply because the software is so unwieldy.

I realize the sorry state of the software industry when a company such as AT&T outsources a basic application such as e-mail. This is a company that can manage hundreds of thousands of miles of fiber, process millions of calls and offer five-nines uptime—but it can't offer e-mail services? Let's not forget that AT&T employees number in the six figures, which throws any economies-of-scale argument out the window.

Oracle has gone as far as saying that in a couple of years it expects to generate a majority of its revenue from renting software. Yet the main driver behind the ASP movement has more to do with stable recurring revenue streams than with providing value to customers.

Large enterprises shouldn't take this lying down. Vendors must be forced to make their software easier to use and implement. It is unconscionable that software vendors get away with telling users they are too stupid to maintain their own software, so vendors should have to do it for them.

West Coast Technical Director Pankaj Chowdhry can be reached at pankaj_ chowdhry@zd.com.

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