With the spectre of the antitrust trial still hanging over Microsoft, chief executive Bill Gates is keen to maintain the impression that his company is unflustered by the ordeal. His speech at the Comdex show in Las Vegas last week diverted some attention away from painful questions about the company's trial and on to the latest catch-phrase in software development - application service providers (ASPs). In his keynote address, Gates demonstrated Microsoft's Office Online, which allows users to dial into a server and access the software at the same speed as access over a local area network (Lan). The only code that needs to be installed on the client PC is a 700K terminal program that is used to connect to the Office server, which is running Windows NT 4.0 Server or, when it appears, Windows 2000 server. Working with BT in the UK Microsoft recently announced that it was entering a partnership with BT to offer Office Online to UK businesses. A trial service will begin before the end of the year, but no pricing details have yet been disclosed by either company. The ASP market is taking off rapidly in the US, where local calls are free. Research by IDC and Forrester puts the projected worth of the market for application rental between $5bn and $6.4bn over the next three years. However, Microsoft admitted that takeup is likely to be much slower in the UK for the foreseeable future. "It is difficult to predict at what stage the ASP market will take off," said Jeremy Gittins, Microsoft productivity group marketing manager. "We are convinced that it will really take off over the next few years. "We may not necessarily see huge volumes of users during the pilot stage, but we hope to get the volume of customers to learn from their experiences," he added. Angus Fox, strategy manager of BT's internet and multimedia division, said he was "looking to get hard data from the pilot phase". In the US, Microsoft will offer Office-on-tap services via its B-Central portal for businesses. The UK version of the portal is expected in the first quarter of next year. But doubts still exist over whether the access speed of Office over the internet will be sufficient for most user requirements. Microsoft technicians are recommending that users have at least a T1 line or an ADSL connection, but stress that the software will perform well over low bandwidth as well. Microsoft claims that this speed is attainable because of the way the online program is designed. The application is actually opened on the server, while the client only looks at a portion of the file that happens to be on the screen. The menus and splash screens have also been configured for low-bandwidth machines by removing the glitter found in the normal version of Office. Users with faster connections can choose not to use these low-bandwidth menus. But Keith Mitchell, chairman of UK internet exchange point Linx, is sceptical about Microsoft's ability to build thin applications, given the company's hard-drive swamping past. "Whether this application will run fast enough is an interesting question. Microsoft unfortunately hasn't got a great reputation when it comes to writing efficient applications," he said. He added that making applications as thin as possible for use by ASPs would be key to the technology's success. "Efficiency is very important - you simply will not get the response time you want otherwise." But there is concern that if the application-hosting market really takes off, companies carrying out previously offline activities over the internet - such as word processing - could lead to congestion online. Mitchell dismissed those concerns and explained that there would be natural developments in internet technology to cope with any increased traffic caused by the rise of the ASP market. "New technologies will give us a lot more bandwidth than the growth in internet traffic as a whole," he said. Piracy will not prevail According to Microsoft, another important benefit of the ASP model is that it will reduce the occurrence of software piracy. "If customers could only get access to Microsoft applications online, there would be no piracy. As we move forward, this will benefit users," said Gittins. In addition to Microsoft, remote-application hosting is being widely adopted by other software companies, including Corel and Lotus. At its user development conference in Berlin last month, Lotus announced its own ASP system pack to offer hosted applications via a Lotus Domino and IBM WebSphere platform. Offering ASPs a platform to host, manage and deliver rental versions of Notes, the pack will include team collaboration, messaging and diary services, as well as instant messaging and shared applications from a portal-based environment. There is no doubt that the ASP market is gaining acceptance, but some doubt whether it will ever totally replace traditional installed applications. The business case for software installed on laptops to work in, for example, an airplane or in other places where there is no internet access available, will persist. Additional reporting by VNU.net. For additional Comdex 99 coverage, see page 2.
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