For small- and medium-sized firms, the decision to compete with large players used to mean having to invest huge sums in installing and then regularly upgrading major application software. but, as Ross Macadam explains, there is a cost-effective, web-based solution
Cleopatra gave the humble asp a bad reputation by killing herself with one. But today’s asp is a different animal: an Application Service Provider or ASP. These organisations offer access to technology resources and business software packages over the internet, or managed private networks based on internet technology. They are more likely to offer access to key documents, diaries, e-mail, practice management, accounting and other business software application packages.
ASPs are keen to point out the benefits of their approach, and the bite with which they can endow their clients. They claim that their clients can avoid the high costs normally associated with the implementation of new technologies and can access services that clients can mix and match to fit their requirements exactly.
The key benefits claimed are: by offering ‘big name’ application software functionality and adopting a rental or pay-per-use pricing model, ASPs allow client organisations to access software facilities that would otherwise be beyond their reach. The target client base for many ASPs are smaller organisations that are looking to grow, but must match the transactional costs and capabilities of their larger rivals.
Technology is increasingly being seen as the strategic differentiator in an information-centric world and this could change radically if the ASP approach succeeds. Think of the consequences – a small firm could offer the same services and leverage the same technologies that are used by its bigger rivals, but without the large fixed costs that its larger rival has sunk into developing its own proprietary IT infrastructure. Savings on the overall cost of ownership could be in the region of 30%-70% depending on the type of application being serviced. IT could become a utility that your firm buys in the same way as electricity or gas: delivered over public internet connections and rented or paid for on the basis of units used.
Neil Cameron, a legal technology consultant, has been examining this area for clients and vendors for some time. He says: “ASPs are initially targeting smaller firms. There are also interesting developments from high-end legal software vendors such as Elite Information Group (www.elite.com) and Keystone (www.keystone-solutions.com), which are making their software packages, or services taken from them, available via this route.”
Established players in the market are waking up to the threat posed by ASPs. Kaye Sycamore, director of business development at Keystone says: “When we decided to offer the full functionality of Keystone Professional into the
market via Keystone Online, we decided that our customers would want to take one of two routes to using and paying for the software.
“The first is via software rental, where for a fee of about £150 per user per month they gain access to a managed service. The second route addresses the requirements of those firms that want to own the software and have the flexibility of moving it either to another hosting service or taking it in-house as their preferences change.” This approach should allow firms to choose the licensing model that fits their size.
Elite.com’s initial offering in this area, called Timesolv allows sole practitioners and small firms to set up and access time and billing facilities over the web. Invoice generation and electronic invoice transmission in EDI format, via e-mail or through a web URL are offered as a bureau service under the Timesolv product banner, as are facilities to allow entry of time/billing information while offline for update at the next connection.
Cameron acknowledges that the market model for these services is in its infancy, and he describes what he sees as the vendors’ strategy: “Put a frog into a pan of boiling water and it will jump out; but put the frog into a pan of cold water, then boil it, and the frog will stay put.” Vendors are therefore building interest in this area by keeping the water cold (or prices low) in the hope that clients will stay on board and expand their commitment as new features and functions are introduced (or the water gets hotter).
So, it seems that top level vendors in the legal market can choose to extract parts of their product and develop it as an internet service as Elite has done, or offer the whole package, as Keystone is doing. Both firms have a proven large firm implementation background and have the financial muscle to open the new markets that smaller vendors do not. They are both opening their doors to smaller practitioners which would not have been able to access their technology.
Legal IT solutions vendors often rely on tight integration with other external packages such as document managers and word processors – the difficulty for vendors of such tightly-integrated solutions is that the supporting software packages are not necessarily embracing the web at the same speed or in the same way. This makes it more difficult to mirror existing client-server functionality in the thin client web-deployable variants needed for ASP deployment.
However, things could be getting easier. In late March, industry heavyweights IBM and Citrix Technologies announced that they were increasing collaboration on an ‘ASP prime initiative’ to help application software vendors move their applications to the web.
Unfortunately, the delivery of services via a terminal server technology such as Citrix is not necessarily the most efficient way, as Neil Ewin of Solicitec points out. “After investigating application delivery via terminal servers we concluded that this could be expensive for smaller client firms, and we have subsequently moved towards developing an HTML-based solution.” Solicitec’s ASP-based offering will be launched in the summer. It presents a
middle path, being a subset of their traditional system, supporting core functions. Ewin has been surprised by market interest.
“We initially targeted the service towards smaller firms, but we are receiving substantial interest from larger firms that are also interested in leveraging this service delivery model to provide round-the-clock service,” he says. Ewin also predicts ASP competition – from a new breed of firm. “Legal firms are already waking up to the opportunity of partnering with or becoming an ASP. There are advantages to all concerned – large firms could rent space on their system to smaller practices, smaller firms would benefit by enhancing their offerings: ‘plugging in’ to the specialist legal services and added value knowledge bases offered by their host.”
Professor Richard Susskind, author of The Future of Law, offers a warning note: “The legal profession is inherently cautious about new technology, but has started to look strongly into areas such as extranet reporting of matter progress, opportunities for e-commerce, improved client relationship and case management. To many larger firms embroiled in the implementation of these initiatives, selecting software service delivery via an ASP will seem like trying to change the wheel while the car is moving.” But Keystone’s research seems to contradict this, as Sycamore points out. “Early indications from our market research are that nine out of 10 practices say they will be buying software services via an ASP within the next two to four years, and that 81% of respondents believe that Practice Management Software is a suitable application for ASP delivery.” The same research bears out Susskind’s concerns: 91% of respondents cite opposition from senior staff within their firms as a challenge that needs to be overcome before ASP services will be used.
The proposition certainly looks attractive: flexible terms on which to try out software, global web service delivery and the relative freedom of the new billing options. Contractual lock-ins should be barred, and moving from vendor to vendor should also be facilitated. However, firms should make sure that, unlike the frog, they keep an eye out for the water getting hotter – and make sure that the lid is not screwed down.
Service providers active on the internet can be categorised as follows:
