NETWORK WORLD NEWSLETTER: JEB BOLDING on
APPLICATION SERVICE PROVIDERS
12/19/01
Today's focus: Service providers in a post-Sept. 11 world

Dear Wincenty Kaminski,

In this issue:

* Service providers' role in business survival
* Links related to ASPs
* Featured reader resource

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THE STORAGE OPTIONS

Ever since September 11th, spending on storage has increased.
How are you ensuring that you're choosing the right network
storage options?  Network World's Deni Connor evaluates the
networked storage options. Before you start spending next
year's budget check out what Connor has to say at:
http://nww1.com/go/ad219.html

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Today's focus: Service providers in a post-Sept. 11 world

By Mike Jude

Something profound occurred on Sept. 11. On that day, a new
paradigm for business was illuminated in an unambiguous way.
Centralizing business operations was finally shown to be a
remarkably bad idea for business survival in both the financial
and the horrifyingly obvious sense.

It turns out that service providers, which have been looking
for a reason for their value proposition, finally have an
example of what can happen to businesses that do not outsource
critical IT functions. For many businesses in the World Trade
Center towers, Sept. 11 meant more than devastation of their
place of business, it meant loss of critical intellectual
property, customer and billing information and critical
infrastructure-supporting business operations. Service
providers are in a position to mitigate many of the risks that
businesses face in the new world of terrorism. However, they
have been slow to preach this message.

The reason for the slowness is probably because of a perception
that the IT infrastructure actually worked pretty well on Sept.
11, so why is anything more required? Additionally, service
providers, like many other businesses, recognize that the
public would find it very poor taste if they tried to
capitalize on the tragedy.

As to the first point, the fact is that the WTC illustrated not
the strengths of the present system, but its weaknesses.
Witness the stories of vendors such as Sun having to truck in
workstations. And who can forget that half of the switching
capacity of Manhattan was lost when Verizon's central office
was contaminated?

IT infrastructure is no longer an adjunct to business, it is
the business operation of the enterprise. If IT is lost, so is
the business.

As to the point of sensitivity to human suffering, who could
argue with the sentiment? However, while many service providers
would rather not use Sept. 11 as a marketing tool, it is still
necessary to point out that businesses that outsource IT become
less of a target for terrorists or subject to the vagaries of
natural disaster.

Service providers offer the astute enterprise a way of
mitigating risks and reducing the exposure to disasters. Of
course, enterprise IT organizations need to ensure that the
service providers they pick offer more security than can be
found internally. Thus, things like diversity and backup
procedures, as well as data security, become important.

Service providers can do more, of course, than just offer
disaster recovery support. By outsourcing things such as e-mail
and customer relationship management, a basis for operations is
established that can be reactivated as quickly as new terminals
can be acquired. Additional outsourced applications, such as
enterprise resource planning functions, can ensure that the
care of employees will not falter during recovery. Although
many functions probably would not be outsourced, it is still
possible to envision a process by which IT mirrors some key
functions so that in a disaster, at least most of the business
can continue unchecked.

Sept. 11 illustrated just how vulnerable we all are. It is also
a wake up call for IT to reconsider outsourcing. Service
providers can be a large part of the solution. Now is the time
to start the dialogue.

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To contact Mike Jude:

Mike Jude is senior analyst at Enterprise Management
Associates. He can be contacted at
mjude@enterprisemanagement.com
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RELATED EDITORIAL LINKS

WorldCom rolls out low-cost managed hosting
Network World, 12/17/01
http://www.nwfusion.com/archive/2001/128449_12-17-2001.html

Breaking ASP news from Network World, updated daily:
http://www.nwfusion.com/topics/asp.html

Archive of the ASP newsletter:
http://www.nwfusion.com/newsletters/asp/index.html
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FEATURED READER RESOURCE

Network World Fusion's The Edge site

Network World Fusion's The Edge is a resource devoted to the
advances in service-provider networks that are shaking up the
old telecom order. In classic Network World fashion, we focus
on the hardware, software and services coming to market - but
this time from the vendors targeting legacy carriers, new
alternative local carriers, ISPs and application service
providers. http://www.nwfusion.com/edge/index.html
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