Star ASP wears on-demand clothing

Star Managed Services, a UK-based ISP, is reviving the concept of an application service provision (ASP), but the company said that unlike previous ASPs, it has got a realistic business model.

ASPs first appeared during the dot-com boom when they promised to relieve companies from the costs of hosting and managing their own applications by allowing them to "rent" applications instead. However, they failed to take off because at the time many IT departments were unhappy about what they saw as losing control of their IT systems.

Launching the service, Star's technical director Mark Lamb said pricing was also an issue because ASPs had to spend so much on their infrastructure that they "priced themselves out of the market" and could not offer customers enough of a financial incentive to change their working practices: "The application pricing on demand is a lot better priced now than it was in the early days of the ASP world," he said.

According to Lamb, the landscape has changed now because companies like IBM -- which is providing the overlying infrastructure for Star -- have invested a great deal in the concept of on-demand computing: "The cost of serving applications is directly related to how many seats we sell, so we have the luxury of making it work with a more successful model this time," he said.

Star is hoping its new ASP service, which is available immediately, will attract both small and large customers: "You might be right at the bottom end of the SME space with an infrastructure of just four servers and that may be two servers too many for you. For the higher enterprise market, the saving story is just the same," he said.

IBM has been one of the leaders in developing on-demand services and the company claims it can help corporations become more efficient and flexible. IBM's products correspond with an "on-demand roadmap", or a series of five technology projects which IBM recommends companies should undergo.

The five components include:

• Standards-based software, such as IBM's Java 2 Enterprise Edition WebSphere line, Linux, and Web services software;
• IBM's Lotus Workplace software to ease collaboration between people;
• Integration products, based on IBM's WebSphere Business Integration and DB2 Information Integrator, for connecting applications and sharing data between back-end systems;
• So-called infrastructure automation software called Tivoli Intelligent Orchestrator for better utilising data centre resources; and
• IBM's hosting services, which give customers the option of a per usage purchasing model.

IBM's competitors, such as Hewlett Packard, Sun Microsystems, Computer Associates and Veritas, have each launched similar utility computing, or flexible, computing projects, although they use different marketing terms from IBM.

CNET News.com's Martin LaMonica contributed to this report