ASPiring high

Raja Simhan T.E.

THE e-mail and the World Wide Web have emerged as killer applications spawned by the Internet and joining the list, if one goes by what industry experts have to say, is the Application Service Provider (ASP).

ASPs address the three vital friction points faced by most organisations while deciding on whether to invest in a packaged software application -- high up-front cost of a packaged software licence, lack of in-house IT human resources to install and maintain the software, and the high cost of building and maintaining the IT infrastructure required to support the application.

However, with an ASP, customers need not pay an up-front licence fee and can outsource the human resource and infrastructure. While the ASP leverages its technical talent and infrastructure across multiple customers and creates an efficient and scalable business model, customers can concentrate on their core competence, rather than worrying about technology.

The ASP, as a concept, has been going around in the international market for some time now. In the Asia-Pacific, the ASP market is estimated to touch $2.5 billion in a couple of years, with Singapore in the lead.

However, in India, the concept is still at a nascent stage. One important reason cited for the lacklustre demand here is the fear among customers that data with a third party will not be secure, say analysts.

But unfazed by adverse factors, the Chennai-based Antarix e-Applications Ltd has taken to ASP as its core business. The company is bullish on the concept, so much so that in the last few months it has tied up with 21 business partners globally. The company's Chief Operating Officer, C. Mohan Ram, shared his perception of the ASP market and his company's prospects with eWorld. Excerpts from the interview:

What has prompted your company to take to ASP as the core business despite the poor offtake and negative perception in India?

In September 2000, the company syndicated IDC to prepare a project report on the ASP market potential in India. And the results surprised us. The report said there were 4.19 lakh small and medium enterprises (SMEs) in the country, of which 1.09 lakh intend to go the ASP way.

Further, when we analysed the complete business models of the existing ASPs, we found that out of the top 50 ASPs in the world, 67 per cent were not doing well, but the return on investment (ROI) for all of them was found positive.

We also found that 17 players were not just making money, but minting it. However, the remaining 33 players did not have a proper business model, made some bad acquisitions, and were also part and parcel of the dotcom boom and bust.

The other 17 players, not dependent on the dotcoms, continue to run their business efficiently. This convinced us that ASP is the business to be and to become the 18th successful ASP player in the world.

Which are the most preferred applications?

For SMEs, the company's target segment, ERP, CRM, financial and customer services and support are the most sought after, followed by SCM, payroll, marketing/e-CRM.

Even if 10 per cent of the SMEs come into our network, it will choke our development centres. The potential is huge -- it all depends on the delivery capability.

Our objective is to provide ASP services to cover the entire gamut of a corporate's IT needs; to establish portals that will enable e-commerce in B2B, B2C and C2C segments; and to deliver committed service levels to customers using our own secured infrastructure.

The company has data centre connectivity between Chennai and Singapore, and plans to have the Mumbai-UK link by August and the Bangalore or Delhi-US by end of September. By October, the entire network will be synchronised.

Antarix seeks to offer all the major applications to various segments of customers on a ``pay-and-use'' basis. It also offers value added e-business services (through its B2B, B2C initiatives) and connectivity and messaging services.

Who are your partners?

Antarix has, so far, tied up with 21 software vendors such as Lotus, Ariba, Cincom (US), IFS (Sweden) and Ibhar (India). The applications are delivered in the ASP mode using the Antarix infrastructure and powered with technology from IBM, AT&T, Philips and Computer Associates.

What about the service cost?

The cost depends on the nature of applications. On an average, the customers will be paying at least Rs 5 lakh per year in the country.

What is your target for the year?

On a conservative note, we have targeted around 200 organisations worldwide by the end of May 2002. We have already signed up with an auto ancillary unit in Sriperumbudur, near Chennai, on ERP, and plan to sign up with a couple of others soon.

Picture: Mr C. Mohan Ram