HostLogic will deliver and manage applications via the internet to Tyco subsidiaries in more than 80 countries. But more important for Tyco is that as a very acquisitive company, using an ASP service will smooth the process integrating IT in mergers and acquisitions. Herbert Goertz, chief executive of HostLogic, says the Tyco deal demonstrates that the economies of application hosting also apply to large and established companies. David Redwood, chief executive of e-know.net, an ASP specialising in providing services to manufacturing companies, goes one step further. He argues that established manufacturers with operations in more than one country stand to make the most from switching to ASP services.
ASPs are the ideal way of optimising their capacity.
They can support 7x24 operations without the usual overheads that implies. A company with seven manufacturing sites currently needs seven IT departments and seven IT managers, with all the costs that implies, and if the system fails it probably happens when the staff have gone home. In addition, he believes that ASPs will find it more difficult to make a profit in the SME sector. Many SMEs have no computing expertise and need far more support than the amount of revenue they generate deserves, while the sales cycle is just as long. Mr Redwood set up e-know.net, based in Telford, Shropshire, in 1999 with backing from the venture capital group 3i.