Users positive about renting software

IT managers quizzed about their likelihood of using an application service provider (ASP) service appear mostly positive about the idea. With Sequent and Cardinal are to enter the ASP market here, Microsoft says BackOffice will be rentable to New Zealand end-users by the end of the year.

IT managers quizzed about the likelihood of their using an application service provider (ASP) service appear cautious, but mostly positive about the idea.

Following announcements last month that Sequent and Cardinal are to enter the ASP market, Microsoft says BackOffice will be rentable to New Zealand end-users by the end of the year from application service providers (ASPs).

The offering follows Microsoft's alliance with EDS and Telecom. Microsoft New Zealand head Geoff Lawrie says the service will initially only appeal to a small part of the market, probably in the small to medium-sized business sector. Companies could pay a set cost for a package that might include applications, the network and provision of hardware and backup.

Microsoft has launched pilots globally (involving the renting of BackOffice components such as Windows NT Server, SQL Server and Exchange), but none are running in New Zealand.

The level of knowledge about ASPs appears to still be in its infancy locally, judging by comments from IT managers about the concept.

Ports of Auckland MIS manager Roger Fogo says although he believes the idea is a good one, it's difficult to comment until full details are revealed.

"It's hard to assess whether it will be a real goer or a bright idea that's hard to implement."

He says there would have to be a clear cost benefit for him to be interested. It could be good for smaller firms, although he says in New Zealand that could include medium-sized business as well.

Outsourcing has traditionally only worked for companies which have reasonably big configurations, he says.

"This is moving outsourcing down to another tier."

IDC New Zealand general manager Dinesh Kumar agrees.

"It ensures Microsoft has access to those markets which it doesn't currently have access to. It's no different to the free PC or free cellphone concept ó it attracts more and more people to the whole proposition."

Rexel (NZ) IS manager William Frew was uncertain about whether it would be a suitable model for Rexel, but he could see a company like Rexel taking advantage of it in the longer term. "I think it is the way things are going to go. You're just going to have an interactive device and you'll choose which application you're going to use and it will download over the Internet."

He says the company has been interested in renting ERP packages.

Warren Garlich, IS manager for Fraser Thomas, an Auckland-based consulting engineering firm, says he would be willing to look at anything.

"I don't think we would use it, though. We're not a big company but the applications we use, we use all the time and we tend to have licences for what we use. If you have a need for an application, you usually need it for a while because it becomes part of your business."

He could see a need where someone might use a product like Microsoft Project for a one-off project. It could also work with specialised engineering programs, when a firm gets a job where a client insists on a report being produced in a particular format from a program the company may never use again (and which could cost more than the entire project to purchase).

Other IT managers say they haven't given the idea much thought, or how it would affect their business.

Sequent general manager northern region Sean McDonald wasn't available before Computerworld's deadline, but last month he said the company's application service provider service is likely to go live this month. The ASP service across New Zealand and Australia will provide ERP (enterprise resource planning), CRM (customer relationship management) and electronic commerce applications across the Web.

Cardinal's Jade Group is also working on an ASP capability.

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