NewsLetter Opinion Application Service Providers are in a position to change the entire structure of the ERP application market. With pervasive access to networks via the Internet, accessing applications from remote locations is easier and cheaper than ever before. Combining these capabilities with ERP skills is very appealing to over-burdened IT shops. There is also a paradigm shift occurring in the ERP market that ASPs are well positioned to take advantage of. Customers are no longer looking at just the cost of software licenses, hardware purchases, and implementation costs.
Customers are now concerned with the total cost of ownership over the life of the application.
Application Outsourcing gives customers control over all of these for a fixed monthly cost. Everyone involved with ERP should be keeping a close eye on this emerging market. If you're an ERP vendor, you need to figure out how you can take advantage of this trend without cannibalizing your software license revenue. If you're a customer, you need to closely examine each ASP's offerings to determine the exact extent of the savings you could realize. This may require a rigourous examination of the current and projected internal IT cost of running your ERP system.