The Analyst's Corner: Why is management suddenly important?

There's another flavor of ASP out there...the management service provider. MSPs are a valuable addition to the mix, offering valuable applications to companies who couldn’t otherwise afford it

As analysts who focus on application services, we’ve found ourselves suddenly covering companies who provide management technologies and services. We are not surprised to be here, but now we need to explain how management—and management services—relate to application service providers (ASPs).

On the Net Related Books

The story begins with service level agreements (SLAs). Last year, it became clear that few ASPs were building everything themselves—from networks and data centers to applications and backend infrastructure.

The first round of partnerships in ASP were between hosting providers and the ASPs themselves. Essentially, the ASPs distinguished their business of application hosting from the data center and network services business. This approach makes sense, but it creates a problem of accountability.

An ASP is responsible for the overall performance for a hosted application, even if the performance problem comes from things that are outside its control—the network or the data center itself. To solve this problem, ASPs resorted to negotiating SLAs with their network and hosting providers.

SLAs provide a contractual recourse when a provider does not meet its obligations, but they still don’t enable an ASP to actively manage the entire application environment. This is where management comes in.

How Does Management Relate?

Application services are managed services. Many early ASPs have equated “management” with “uptime.” As long as the servers are up and the applications are running, the application service has been “managed.”

Because ASP customers rely on hosted applications—whether messaging or e-commerce—they demand predictable performance. This requires the ASP to distribute processing requirements and to predict problems that can adversely affect application performance.

Management platforms are expensive and take months to install. ASPs use these platforms to manage the performance of their hosted applications.

Because management platforms are so expensive and time-consuming to install, many companies do not have sophisticated management capabilities. Management Service Providers (MSPs) are a new category of ASP that have emerged to fill the needs of managing networks, systems and applications. In the MSP model, a management platform is delivered as a hosted application service.

Not All Management Is Created Equal

Management is a broad term that means many things to many people. Management generally fits into three major categories:

• Network Management

• Systems Management

• Applications Management

Each of these management disciplines focuses on different parts of the applications infrastructure. Networks consist of carrier circuits, switches, routers and local area network segments, and there is a host of technology for managing network elements and alarms. Systems management covers all sorts of computing infrastructure, including: mainframes, client-server environments and distributed Web computing. Applications must be managed from the database through the business logic to the client device.

Management technologies tend to focus on a single management discipline. Network management tools are often not the most effective tool for managing databases, and vice versa. One ASP we recently spoke with said that no single management tool does an effective job of managing the entire applications environment. This is important, because an ASP needs to be able to manage networks, systems and applications all at the same time.

MSPs are stepping up to the challenge. Companies like Silverback Technologies (www.silverbacktech.com) have begun by focusing on network management and security. Silverback provides the necessary tools for small- to mid-sized companies to effectively manage and secure their networks. Another company, @manage (www.atmanage.com), provides data collection for both network element and systems management functions.

Over time, we believe that MSPs are the likely choice for providing comprehensive management for an entire applications environment. From the look of things at Networld+Interop last month, applications management services are around the corner.

Companies can buy management services today—even if they are not ready for an application service. If you look at it one way, management services may be the gateway to ASP for many companies. From another perspective, MSPs are yet another type of ASP, delivering an extremely valuable application to companies who couldn’t otherwise afford it. Either way, MSPs are an extremely valuable addition to the ASP business.
Dan Taylor and Barton Taylor are Analysts at Giotto Perspectives, Boston, MA.
This column originally appeared on the internetTelephony.com website.

Visit the Giotto Perspectives website.

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On the Net

The MSP Association
A non-profit, international industry consortium formed in June 2000 to define and promote the emerging Management Service Provider market

The List of ASPs
The definitive ASP Buyer's Guide

All About ASP
From the ASP Industry Consortium, an international advocacy group
of 645 companies in 25 countries

ASPnews.com

ASPstreet.com

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Related Books

Application Service Providers:
A Tech Brief Series Book
by Traver Gruen Kennedy
Paperback - 208 pages 1 edition
$23.99
Order this book.
Note: This item will be published on December 8, 2000. You may order it now and it will be shipped when it arrives.

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Outsourcing Via Application Service Providers (ASP):
Guidelines, SLAs and Success Factors
by Management Advisory Services
Ring-bound - 150 pages 1 edition Vol 1 (September 25, 2000)
$130.00
Order this book.

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