Customers thinking of using Application Service Providers (ASPs) should be wary if they require high levels of package customisation or integration with third party applications not covered by their service level agreements (LSAs).
According to Rita Terdiman, vice president of outsourcing at the Gartner Group, there is still an open question as to how ASPs will tweak their business model to rent custom packages to users and which ones will even be prepared to do so.
She explained at the CRM and Support Services conference in San Francisco on Tuesday: "Not all will take this route and it's not clear how they will make money if they do so. The basic value proposition is to rent the application, but don't expect too much customisation."
She continued: "The applications are currently preset with fairly standard templates and ASPs are not going to go through the massive customisation currently seen with ERP applications, although this will change over time."
This will also lead to a pollution of ASPs' current simple pricing model of charging customers on a per user basis every month, Terdiman explained, forcing vendors to create more complex add on pricing models.
She added: "And as environments become more complex, there'll be a requirement for more integration and the industry has not thought ahead on this at all. There will be more applications out there that have to work together and partnerships will become more important. ASPs will be there to get partnerships up and running and to be a single point of contact."
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