News

Source: The Wholesaler, October 2001

By now we all know the importance of technology in the success of any distributor's business. Without the most current enterprise systems, you're losing time, money, and, quite possibly, customers.

Despite the return on investment most distributors realize from an enterprise system, the initial outlay of funds can be prohibitive. In addition, with no guaranteed outcome, making the wrong choice when selecting a solution can be devastating to your business.

Fortunately, Application Service Providers (ASPs) can deliver and manage applications and computer services from remote data centers to multiple users via the Internet or a private network for a much smaller initial investment. Best of all, by going with an ASP, you minimize your technology risks.

What is ASP?

With ASP, applications are implemented in a manner similar to a traditional thin-client model, except that the server is at the ASP data center and the client is essentially nothing more than a terminal that supports thin-client computing. The ASP's job is to keep the system running and available, and to keep the customer's data safe and secure.

The programs and data are installed and maintained at hosting facilities staffed with professional information technology (IT) personnel. All you need is a thin-client terminal for each user, so it's easier to make applications available to many more people in your organization. Especially convenient is that you can access the application from anywhere - home, airports, hotels, branch locations, and remote warehouse sites.

All of this is possible thanks to the added bandwidth of the Internet, which lowers the cost of providing service. In addition, ASPs take advantage of economies of scale when providing services to multiple distributors. ASPs often get better quanity discounts on hardware and software, spread out the cost of equipment over several customers, and hire and keep topnotch IT personnel who can share their expertise to the benefit of multiple customers.

The Benefits of ASP

Distributors who contract with ASPs see them as "business enablers," who allow them to concentrate on growing their businesses rather than focusing on implementing and maintaining software and hardware.

With ASP, implementation time is improved. Because the majority of the hardware is housed at the hosting center, the only hardware needed on site is what you would traditionally have at a branch - a workstation and a printer.

Because you contract with an ASP to provide service over a period of time, the costs are controllable and predictable. A monthly fee covers the entire system - including the software, hardware, and networking services. In addition, you save money by eliminating the need to hire an IT staff to implement and manage a system on-site, and the infrastructure is likely to be more reliable, flexible, and secure than the in-house alternative.

Growing distributors benefit from the flexibility to accommodate mergers, acquisitions, or reorganizations, while maintaining corporate standards without adding computing infrastructure.

Selecting an ASP

Of course, going with an ASP isn't without risks. There are two key questions to ask when selecting a service provider.

Is the infrastructure reliable, flexible, and secure? You're going to conduct most of your business over the ASP infrastructure, so make sure that you will have minimal downtime, the flexibility to accomplish all you need to be successful, and, most importantly, be able to do it in a secure environment.

Can the software be customized to fit my business? Every business is different and an off-the-shelf enterprise software solution won't work for everyone. Make sure the ASP can personalize their application to fit your needs.

The Hosting Alternative

Recently, ASPs have begun offering an alternative to their traditional service. Hosting services will maintain your hardware - or infrastructure - for a monthly fee. Working the same way as ASPs, the only difference is you purchase the software and pay for any upgrades or customizations, but worries about repairing hard drives and backing up data belong to the host.

ASP and hosting both provide a viable alternative to distributors who value what technology can bring to their business, but lack the IT expertise or financial resources to commit to purchasing a complete system.

Back to Top