Want to be an ASP? Partner with CCL
03.06.2002 - CCL Views

Business in the US is set to face a period of consolidation over the next few years. Many companies have made large investments in IT infrastructure only to find that productivity gains have been patchy. Going forward, investment is likely to be focused on the integration of existing systems, as well as finding ways to manage running costs and deliver value from the investment already made.

This need not be bad news for the IT solutions provider, but it does point to the need for a client-led, rather than customer-led approach to doing business. The US experience is teaching us that no matter how good they are, few business IT solutions will really deliver on their promise unless they address the unique qualities of each business that they serve. What's more, they won't deliver 'out of the box'. Business processes will need time and encouragement to evolve, in order to maximise the benefit of IT. And the client will need the opportunity continually revisit the solution, with their IT partner, to drive further improvements and gains.

ASPs, or application service providers, have been predicted to be the future of business IT provision for a number of years. Despite its obvious advantages to solutions providers and their clients, industry experts have been surprised at the slow development of the ASP business model. One of the reasons for this could be the ongoing nature of payment, which sees the client receiving a very valuable product and service on day one, with the solutions provider receiving payment slowly over an extended period of time. The process of monitoring payment and credit control costs the business, and the lack of cash may restrict the amount and speed of growth.

A rental finance solution, and a business partnership with CCL, allows software businesses to become ASPs, without having to face these challenges. With rental, the solutions provider gets paid on delivery, whilst the client spreads payment over the course of the term. At the end of the term, the client either buys the product for a nominal sum, or upgrades to the next solution. What's more, a Rental Exchange® solution can be created to ensure that a cash lump sum is available for the upgrade, for delivery to the solutions provider on installation.

The ASP business model is really a win-win situation for both solutions providers and business IT clients. If you'd like to find out more about how we can help you to become an ASP, please contact Rachel Yates at CCL plc.