ASP to SAAS to Clouds -- Oh my!

Moving up the stack

Any shift into service delivery moves service providers “up the stack” from simple bandwidth providers and into the app business. But that doesn't mean the first step has to be right into mission-critical and complex business process applications. ISPs made their successful leap into software via Web hosting and straightforward e-mail services. The next few steps up the stack — to additional messaging and new security services — don't have to be a giant leap.

Verizon Business, for instance, offers an array of managed services, including a new network access control offering that was made available this past summer. Qwest recently launched a family of mobility applications delivered as a service. SaaS provider Perimeter eSecurity, meanwhile, does almost half of its business through the channel, including deals with Tier 1 and Tier 2 service providers, offering on-demand security services to enterprises.

Partnering with carriers has a “fairly straightforward value proposition,” said Doug Howard, chief strategy officer for Perimeter. “We can do it better than they can on day 1 and certainly a lot more cost-effectively than they can. It falls back to the basics of outsourcing,” he added, noting it's the same for carriers as for the enterprises such services ultimately help.

Indeed, SaaS partner solutions, such as those from Perimeter or the ones that populate Jamcracker's growing service provider solutions catalog, point to another trend: Carriers don't need to build, or even own, all the software services they deliver over their networks. In fact, it's probably better if they don't. But such an orientation does force service providers to think hard about what it means to be a “service” provider in today's world.

“It's really a subtle shift in thinking,” Crawford said, noting that it's important for carriers to separate their traditional operational expertise from the sales and marketing skills required to sell SaaS apps. “The classic approach for carriers is to build out a service and then roll it out to all their customers. With SaaS or cloud services now, there's a realization that the service provider doesn't have to host every single service. Do they build a huge data center with every service owned by you, or do you operate the ‘railroads’ to deliver your own core services but also third-party services?”

That evolving view has a lot to do with the proliferation of software and computing features now capable of being delivered “as a service.” When the focus was on simple Web hosting or e-mail services, or even on delivering one or two core applications such as those from software vendor SAP, a carrier could try to “do it all.”