Agree to Disagree When it comes to the emerging business model of business service providers (BSP), nobody agrees on a precise definition. Just about everyone believes, however, that BSPs extend in some way beyond the basic application service provider (ASP) model of pure application hosting.
The BSP acronym first began getting bandied about by industry analysts nearly a year ago. Since then, some service provider startups, such as eConvergent, have been dubbing themselves BSPs straight out of the gate. Meanwhile, existing companies ranging from global software and services company Candle Corp. to application developer Lawson Software are adopting the term to help describe their own programs.
"There are some BSPs that do a lot of integration," says Aubrey Chernick, chairman and CEO of Candle. "But in my view, that isnt always necessary. A BSP might be able to add value with just a single Web application, for instance."
Candle launched its CandleNet offering as a management service provider (MSP) two years ago. Today, Chernick regards CandleNets service as both an MSP and a BSP.
Analysts offer a slightly different take on the BSP market. "As the ASP market expands and re-forms along different tangents, the demand for more and deeper services is creating new companies and products dedicated to performing the complete service, not just hosting software," wrote John Hagerty, an analyst at AMR Research, in a recent report. "We call this BSP."
Other research firms that have described the BSP model include International Data Corp., Gartner Group and Yankee Group. Some analysts emphasize the tendency of BSPs to solve business problems or add business value. Others talk up the ability of BSPs to assemble and preintegrate, as well as host multivendor "best-of-breed" applications for their customers.
Is Integration a Must? EConvergent, for example, integrated products from multiple software vendors, including Cisco, E.piphany and Kana to build its BSP services for customer relationship management (CRM).
"When we came to market with our service, ASPs werent providing a lot of value," says Clyde Foster, eConvergents president and CEO. BSPs add value by outsourcing an entire piece of the IT infrastructure—such as CRM—for their customers, according to Foster.