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The Web: ASPs the next wave online

By GENE J. KOPROWSKI, United Press International   |   July 21, 2004 at 11:36 AM
A weekly series by UPI examining the global telecommunications phenomenon known as the World Wide Web.

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CHICAGO, July 21 (UPI) -- Terrorists launch a chemical attack on the United States -- and the American military reacts in minutes, by means of a cutting-edge Internet application.

In the middle of the night, fighter pilots are rousted out of bed by automated phone calls sent over the Internet. As each pilot picks up the receiver, his response is routed securely to an application service provider, which automatically begins the process of getting his warplane ready for flight -- before the pilot even arrives at the air station.

"That's an early warning and call mechanism," said Peter Berghammer, chief executive officer of Copernio Corp., an application service provider serving the aviation, military and space markets, located in Huntington Beach, Calif. "You can start filling up those planes with this system. The call generates a response that the pilot is on the way, and that goes over the Net," he told United Press International.

Application service providers -- ASPs in Webspeak -- have emerged in an intriguing way during the last 18 months. They actually debuted during the dot-com bubble in 1999, when the benefits of outsourcing applications such as e-mail and database management over the Internet were touted to consumers and business customers.

"ASPs were premature and over-hyped in 1999 and 2000," said Gary Griffiths, chief executive officer of Everdream Corp., in Fremont, Calif. "Neither the infrastructure, nor the real understanding, was in place to support ASPs. But there was some neat stuff, from a technology point-of-view," he told UPI.

The idea was that smaller enterprises should not have to purchase the software and servers they needed on site, in particular because they probably would have to upgrade it in a year, anyway. So why not pay a monthly service fee to an ASP, which would manage the whole process online?

Like many other brilliant technology ideas birthed during the late 1990s, ASPs stalled when the economy was dragged down by recession and two wars.

Now, that is changing.

A recent study by AMR Research, an IT consultancy in Boston, indicated that 2 percent of the total software applications market is managed by ASPs today.

In addition to the surging economy -- which improves business confidence -- and IT spending, there are other factors at work here, experts told UPI.

"We've seen over the last year and a half a dramatic increase in the availability of broadband," said Jim Pack, chief executive officer of AdvancedMD, an ASP in Salt Lake City.

By having high-speed Internet access -- broadband -- small businesses such as doctor's offices and even regular consumers can, and are, using ASPs, rather than purchase software outright. They are employing ASPS for applications such as e-mail, groupware, intranets, extranets, and anti-virus and spam protection.

"We're working with physicians and hospitals on outpatient and inpatient services," Steve Williams, senior vice president of MedSynergies Inc., an ASP in Dallas, told UPI.

The company has seen 30 percent growth, as doctors go high-tech in their offices and use the Internet for insurance claims processing, and for analyzing why certain claims are turned down by insurance companies, while others are not.

"That can reduce their denial rate, and improve their cash flow," said Williams, of the ASP technology.

Similar to a Web-hosting service, but more sophisticated, the ASP provides doctors' offices with secure Internet access and protects the information with encryption and other measures to ensure it complies with federal patient record-protection laws, Williams said.

"Most doctors haven't had the ability to look at the analytics of their patient populations along those avenues," Williams explained. "Having it on the Internet gives them a baseline system to monitor their services."

The software is so sophisticated that one technology developer makes 95 percent of its sales calls and demonstrations over the Internet.

"We recently closed a deal with a 300-doctor practice in Texas and India that was done completely over the Web," Pack told UPI.

With the new federal rules for patient data protection, many doctors offices are starting to eye the ASP option. The data is secured, offsite, via 128-bit encryption, and accessed with biometric controls, and not located on a computer in a broom closet, or under the receptionist's desk, Pack said.

In addition to security, doctors have more flexibility in treating patients, especially in smaller communities. Since they can access their medical records wherever they are, whenever they want to, over the Internet, they can visit rural offices more frequently, without the need for on site staff, to manage case records.

"With a Web-based 'app,' they can log on from anywhere," Pack said. "That's one of the things driving the growth."

The military is also using ASPs in pilot and prototype programs, experts said. One new application is in-flight diagnostics and maintenance preparation using the Internet, Berghammer said.

"A colonel or above can keep very close tabs on his flight wing," he said. "If repairs are needed, he can see if the parts are available, in-real time, at the warehouse. Any IP (Internet Protocol) network is fine."

Often, however, for national security reasons, the military uses proprietary networks instead of the Internet, Berghammer said, while commercial airlines relying on ASPs are using the conventional Internet.

"You can use the Internet to diagnose problems, from the plane," said Berghammer. "It's very cool."

Consumers are using ASPs to zap porno and spam e-mails and prevent their children from seeing the objectionable material on their home PCs, experts said. The security ASPs will screen incoming e-mail, and compare it to a database of banned materials, before letting it get through to the end user.

"We get lots of calls from moms, crying on the phone, telling us about how Johnny was doing something on the computer, and got connected to an automated porno dialer, which billed them $200 for phone services, without them even knowing it," said David Haadsma, president of Bsecure Technologies Inc. Fort Walton Beach, Fla.

Some consumers like the ASP approach, rather than having to buy software and install it on their computers and upgrade it constantly to deal with the latest online menace, Haadsma told UPI.

Though there is something of a renaissance in this technology sector, the future is far from assured for many ASPs.

"The ASP market is in currently in flux," said Duncan MacPherson, co-chief executive officer of Pareto Systems Inc. in Ottawa, Ontario. "After the tech bubble burst, we saw hundreds of ASPs washed out of the market," he told UPI.

Microsoft Corp. and other major players, such as Bell Canada, are eyeing the ASP technology as a way to distribute software. They also are working with established players, such as the publicly-traded Apptix, in Sterling, Va., said Alex Hawkinson, the company's chief executive officer.

"People want software delivery that is more efficient, and more reliable," he told UPI.

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Gene Koprowski covers telecommunications for UPI Science News. E-mail sciencemail@upi.com

© 2004 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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