Application services providers are rapidly creating a new business model. By directly linking and integrating their services, they are creating networks of related services that look to the user like a single point in the virtual world, but which bounce the user session around the Internet to wherever a needed service is available. Businesses pay for these services, eliminating the need for users to subscribe to a portal to obtain the required service.
It's a model that is meeting with some success, but some experts warn that these far-flung setups may prove unreliable if not properly managed.
Today, for instance, a curious bird watcher anywhere in the world can log in to Wild Birds Unlimited in Carmel, Ind. The surfer connects to Wild Birds' home page on a server at The Web Space Outlet, a hosting services provider in State College, Pa. There, customers can buy products for bird feeding and bird watching with e-commerce software licensed from Miva in San Diego. Or they can read content related to bird feeding and bird watching, written by Wild Birds' staff in Carmel and uploaded to the State College server.
To get directions to the nearest Wild Birds franchisee, users can click on the store locator link, and the session gets passed to Know-Where Systems' server in San Jose. If the potential customer wants to visit the local franchisee's Web site, a click on the store's link passes the surfer to a server in Memphis, Tenn., operated by Kinzan of Carlsbad, Calif. This server hosts Web pages for Wild Birds' 270 franchisees in 43 states and three Canada provinces.
The information technology (IT) staff at Wild Birds' Indiana headquarters uses Kinzan's development environment to directly manage content on the corporate Web page in Memphis. Wild Birds' local store owners also use Kinzan's product to customize a local store page with information such as items on sale, contact information and hours.
The most popular feature on Wild Birds' site is a Web cam focused on a bird feeder in the chief executive's backyard in Indianapolis and linked to the Pennsylvania server. Seamless integration means that surfers never realize their requests for services have bounced them from server to server, operated by ASPs all around the country.
"We want to make it seamless and easy for customers to use. But it's also easy for us to maintain without a large IT staff," says Marty Bird, Wild Birds' director of communications.
Small ASPs with unique services are linking together seamlessly so that a surfer can move from one to another without realizing the transfer has taken place. In the process, customers obtain a greater variety of services from a larger pool of ASPs, without having to pay membership fees or subscribe to a central, portal-like ASP. Businesses such as Wild Birds pay the ASP to provide the service to their customers.
"The weakness of second-generation ASPs is their inability to share information," says Vernon Keenan, Internet analyst at Keenan Vision, a San Francisco market research firm.
First-generation ASPs, such as Corio and USinternetworking, appeared in the late 1990s, offering to lease complex applications such as Enterprise Resource Planning, customer relationship management and supply chain management. Second-generation ASPs offer a unique service written specifically for access over the Internet through a Web browser.
"They tend to be islands of information. There is a resistance to partnering in a business services network, because some second-generation ASPs believe it dilutes their relationship with the customer," Keenan says.
Barry Bakalor, president of locator services ASP Know-Where says: "Early on, we realized we were providing one service to companies with multiple locations, and there are other services those companies need. We are partnering with other ASPs that provide valuable business-to-business services targeted at companies with a large number of locations."
Tim Clark, senior analyst at Internet research firm Jupiter Communications, says: "It works great if the applications integrate seamlessly, but when different people are writing different applications, they may not work together well. ... One weak link in the chain will lose the customer. Somebody has to pay attention to the overall integration of all these applications."
The vendors of the development tools for integrating the services say they have that base covered. Gari Cheever, president and CEO of Kinzan, says: "We integrate the service providers and open up their platforms to other service providers with a developers' environment. The Web site is more than a picture. It's something that does something for the user, connecting the user to other services, storage, legacy databases and applications."