Customizing the IT Process | Article

CDSmall businesses are flocking to Application Service Providers (ASP) because the ASP model allows them to be able to afford top tier applications whose cost had been out of reach before. However, ASPs typically offer standardized solutions with minimal customization.

But the challenges that face Fortune 500 companies are also nipping at the heels of small and medium sized corporations. They, too, are searching for customized applications at a cost they can bear. Application Park, a privately held ASP based in San Francisco, California, has a solution to this business conundrum.

“We are lowering the bar to customize business applications,” says Aaron Sperling, chief executive officer and co-founder. “We are democratizing the IT process. We’re allowing the little guy to get the capabilities only the larger players could afford with our self service model,” he says.

The company has assembled a library of applications that attempt to fit the needs of these buyers. The customers are able to customize the applications they use through their Web browsers. In addition, they can build a new application on-line without knowing any programming languages or HTML. Buyers can make these changes because of the company’s proprietary technology, called the Application Park Framework Engine.

For example, Application Park buyers can design a form any way they want. The firm’s technology then defines the necessary data base behind the scenes, according to Sperling. Ditto for reports which the firm’s buyers receive on-line.

Solving the Problem in an Afternoon

Sperling likens his company’s offering to home building. Custom home builders start from scratch, pouring a foundation, framing the house and then topping it off with a roof before completing the interior finish out. They have to repeat the entire process with each new home. But homeowners can also buy a pre-fabricated frame and just use a few two by fours to hold that frame together. “We’ve built the framework with our applications, so we’ve already done the heavy lifting,” he says.

Sperling says Application Park has taken the major business functions and tried to make them easy to use, so easy an unsophisticated user won’t be frustrated. Sperling insists new users can sign up on their Web browsers and solve their companys’ business problems in an afternoon. He maintains even a newbie can customize an application in the application library in an hour.

“Our users don’t need technical experts,” he points out. Its buyers are satisfied because Application Park did not “dumb down an enterprise system.”

The ASP has also built some horizontal applications like sales and recruiting. To date, there are 13 different applications on its Web site. Moreover, the ASP is responsible for data security and back up.

Currently the company has over 1,000 registered users who can sign up for three levels of service. The introductory level limits the customer to five free users for the first year. Application Park charges $9.95 for each additional user. The second level costs $14.95 per person and allows each user to access the applications from a Web-enabled cell phone or a personal digital assistant (PDA). This level of service also includes graphical reporting.

These levels are so affordable because banner advertising underwrites the cost of the services. But if those banners are irritating, users can pay $19.95 a month and be banner free.

The Private Label Program

In addition, Application Park is forming partnerships with other Internet companies who are providing these services to their customers in a private label relationship. Application Park is then sharing the resulting revenue with these ASPs. These companies, which include Internet service providers (ISPs), business portals, telecommunications companies and personal computer manufacturers, are looking for new revenue sources. Currently there are eight companies in the private label program.

In addition, Sperling says providing these applications binds hard-to-attract customers ever more closely to these providers. “They can create a tighter relationship. Their customers don’t have to go to another ASP or portal to find what they need. Out of sight, out of mind,” says Sperling.

Application Park is a spin-off of an e-business professional services firm. The principals had a lot of experience building business-to-business (B2B) technology. During these engagements, the light bulb went on. The principals decided to build a framework for hosted business applications. They were able to build this system from scratch because they had no legacy software to hamstring their thinking.

The company opened its doors in September, 1999 and launched its offerings in June, 2000. There are 16 employees.

Lessons from the Outsourcing Primer:

  • Small businesses can customize applications using their Web browser without knowing any programming codes or HTML.
  • ISP, telecommunications companies, business portals and computer manufacturers can become ASPs and offer their customers one-stop application shopping.
  • ASPs can provide affordable pricing because in some cases advertising revenue underwrites the cost.
  • Buyers can receive applications on their cell phones or PDAs.

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