Thursday, March 27, 2008

Blowing Smoke Up Your ASP

I often remind my clients that, just like the rest of us, high-tech businesses are subject to the rules and laws of misleading advertising. As new service delivery models and technologies proliferate in the market, the phrases we coin and the terms we use to describe them often evolve into de facto standards. And where there is a perceived standard, liability for inaccurate marketing follows.

In the consumer sphere, "high definition" tv is the current target. In my view, "software as a service" is not far behind. There is a perception that having a SAAS-delivered solution tells customers and investors that you're on the bleeding edge; "SAAS" is this year's "ASP". But are all SAAS providers actually providing SAAS? The answer depends on whether SAAS has the market perceives the term as a generic description of service delivery or something more.

Maintenance fees should not exist in a SAAS model, for example. The essence of SAAS is access to the best and the latest version of the application, all the time. Similarly, is it fair to call other remote desktop technologies SAAS? Is the customer receiving the same perceived benefits (including scalability and security)in those cases as it would if it were paying for a mutli-tenant, scalable application that is hosted and managed in a robust environment? Time will tell.

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