Corporates turn to ASPs in skills crisis

A worldwide shortage of skilled IT workers is forcing large companies to adopt the application service provider (ASP) model, traditionally aimed at small and medium-sized businesses.

John Meyer, European president of EDS, said today that the current skills shortage is "acute and getting scarier, especially with vital websites now running non-stop, 24 hours a day".

The Information Technology Association estimates that 850,000 technology jobs worldwide will go unfilled this year, said Meyer in his keynote speech at IDC's European IT Forum in Monte Carlo.

"For top recruits, salaries and compensation packages of $1m are not uncommon. Managed services [ASPs] provide applications and the people to install them."

Meyer said that, although traditionally ASPs have targeted small and medium-sized companies, they are now getting half of their business from large companies - up from 22 per cent last year.

"While ASPs are attractive to medium and small companies, they are now heading for the Fortune 500," he said.

However, Meyer warned that companies should exercise caution when selecting an ASP. "Many of the 400 or so ASPs that exist are actually partnerships in which each player is responsible for just one link in the supply chain," he said.

"Also, some ASPs aggregate or broker the services of smaller ones. But if several players are involved, which one do you call if something goes wrong?"

Meyer said security and financial stability are also important considerations. "The slightest security glitch can ruin reputations, and ASPs should provide meaningful service-level agreements to protect their clients' business.

"Today, admittedly, this is till an immature industry and if anyone were to bet on a major shakeout they would probably be right. However, betting that ASPs will fade away is a strategic mistake. If ASP isn't on your strategic agenda, put it right there, right now."