But there is one area of distinguishing feature that leaves no room for interpretation - whether an ASP has built its own data centers or is collocating or renting data center space from another service provider. Most other ASPs outsource their data center needs to other providers. Corio, one of the better-known ASPs, has set up caged servers in Concentric Network and Exodus Communications data centers. This arrangement allows Corio to better focus on its expertise - deploying, maintaining and monitoring applications, says Jonathan Lee, founder and CEO of Corio.
Some customers are comfortable with the data center outsourcing model.
David Blumhorst, director of IT with Clarent, one of Corio's PeopleSoft customers, says he's not concerned with the fact that Corio doesn't own the data center where his company's application servers are hosted. But on the same note, USinternetworking customer Mark Elbaum, director of information systems at Sunburst Hospitality, says USinternetworking's data center was one of the reasons why his company ultimately choose the ASP's PeopleSoft application hosting services over those of competitors. It's not a stretch to believe that an ASP that built its reputation offering rock-solid data center collocation services can provide just as much reliability as one that built its own infrastructure. But it is a stretch to believe that the majority of conservative business users will be satisfied outsourcing core business applications such as SAP, Siebel or PeopleSoft to an ASP that has to rely on another company to host the applications. Perhaps Corio's Lee is right when he says that most of the company's customers don't even ask where their application servers will be hosted.