MSPs: The New Hosts

Computerworld - In 2002, Black & Veatch Corp. signed on with an outside service provider to run and maintain its procurement software. But as business grew at the engineering consulting and construction firm, so did the demands of its partners and clients. They wanted access to documents that could help them with the procurement process without having to pass through B&V's firewall. They also wanted to collaborate with one another on projects via the Internet -- a big request that's not usually handled by a traditional application service provider. But it's one of the many types of added services offered by the next generation of service provider -- the MSP, or managed service provider.

MSPs have emerged over the past five years as an alternative to traditional application service providers.

Because the roles of ASPs and MSPs overlap, analysts differ in how they distinguish between the two categories, but most agree that with an MSP, the commodity-based model of the ASP has been replaced by an organic partnership.

The Icing
Traditional ASPs host standard applications with little customization on their servers for a monthly fee per user. Some might offer limited extra services. An MSP will offer customized applications and throw in business processes, as well as engineering, security, maintenance, and monitoring and reporting of network servers. In a fully outsourced network management arrangement, an MSP can manage advanced features like IP telephony, messaging, call centers and virtual private networks.

"Hosting Web sites is literally a commodity on the market today," says Michael Lamb, director of e-business and Internet service at Overland Park, Kan.-based Black & Veatch. "It's very difficult to find a company that understands our business, what our true business requirements are and really tries to help us fix things with our clients."

LoadSpring Solutions Inc. in Lawrence, Mass., was able to grant B&V's partners and vendors access to designated procurement documents, as well as host a separate Internet-based collaborative environment for project management where participants can securely share information, schedules and designs. "We can collaborate with those clients without opening the security door. That's really where they're providing the most valuable service for us," Lamb adds.

Business growth, demands for custom systems, concerns about security, budget constraints and limited workforces are among the many reasons why companies are becoming more interested in MSPs.

American Airlines Inc., for instance, chose San Francisco-based Totality Corp. to host its Web site, contact center and voice self-service systems after realizing it would need to hire teams of elite engineers to manage complex new technologies that recognize voice commands or automatically forward flight information to wireless devices. What's more, technical issues were becoming customer experience issues, and the slow advancement of online systems began affecting business relationships with customers.