Government information technology officials gathered Wednesday to learn about application service providers, or ASPs-companies offering a new type of IT outsourcing now becoming popular in the private sector.
While the term ASP is a new one, the idea is not. In essence, ASPs are data centers. The main difference is that ASPs provide their services-a myriad of applications such as messaging, personal productivity applications and software for procurement, financials and human resources-to customers using high-speed networking connections over the Internet.
Some familiar faces such as Intel Corp. and Micron Electronics Inc. recently entered into the ASP business and are competing against brand-new companies such as Exodus Communications Inc. and USinternetworking Inc.
Government agencies using ASPs would pay a fixed rate to use the service. ASPs advertise application outsourcing as being cheaper than agencies purchasing software licenses, administering the software, customizing it and keeping up with new versions.
"The timing for ASPs is good," said George Molaski, chief information officer at the Transportation Department, because as agencies move ever closer to e-government, ASPs say they can help solve IT problems including the steady loss of technology experience and the struggle to keep up with emerging technologies.
"IT is no longer the core business of government," Molaski said. Molaski added ASP services could help enable the government to get out of purchasing its own IT hardware and software. "ASPs are driving us toward thin clients," Molaski said. Thin clients are computer terminals that do not store information locally and must access applications housed on a server.
"It makes sense and reduces costs. Most government workers need [only] messaging, spreadsheet and word processing applications. There's not too much data that has to be housed on a computer these days. Government should stick to its core program of governance," Molaski said.
"Industry needs to drive government to a standard," Molaski said. Yet if ASPs win federal business, agencies may not have much choice when it comes down to software standards. The reason is that "you have to choose from the menu of applications," said Todd Weller, an analyst with Legg Mason Wood Walker Inc.
USinternetworking's menu, for instance, includes entrees from Microsoft Corp. for personal productivity applications, Oracle Corp. for its databases, PeopleSoft Inc. for human resources and financial software, Ariba Inc. for business-to-business procurement software and BroadVision Inc. for workflow and knowledge management software.
"ASPs can help with the expense of software and integration, fast changing technology and the shortage of IT staff," Weller said. "The Internet is transforming industries. An ASP's solution must alleviate some pain on the part of the customer."
ASPs tout the bulletproof security and top-of-the-line hardware that fill their data centers. "With an ASP there is no single point of failure," said Richard Terhorst, vice president of the eastern sales region with USinternetworking.
To live up to guarantees of 99.9 percent data availability, some ASPs have toughened their physical locations. Micron recently opened a data center in a former missile silo in Idaho. Exodus' data center in Northern Virginia is designed to withstand small arms fire and even explosions.
At least two government agencies are already using ASP services: the Federal Aviation Administration and the Minerals Management Service. The Minerals Management Service's Royalty Management Program is using PeopleSoft financial software hosted by USinternetworking for managing money that comes from the sale of resources originating on Native American lands. USinternetworking would not comment on its relationship with the FAA.
Molaski's comments and an ASP panel discussion on Wednesday were part of the Information Technology Association of America's ASP Program.
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