Originally appeared on Printwriter.com
By Chuck Gehman
In a very short period of time, the business world has seen the widespread adoption of a whole new category of company, the Application Service Provider (ASP.) The graphic arts industry, as with many other vertical markets, is the target market for quite a few of these new companies.
Some think of ASPs in terms of e-commerce, but that is really only one example of the types of services these companies can offer. The ASP Consortium, www.asp.com, an industry trade association, defines Application Service Providers as follows:
“An ASP deploys, hosts and manages access to packaged application(s) to multiple parties from a centrally managed facility. The applications are delivered over networks on a subscription basis. This delivery model speeds implementation, minimizes the expenses and risks incurred across the application life cycle, and overcomes the chronic shortage of qualified technical personnel available in-house.”
This is a very basic definition, and it addresses all software in the context of the ASP model. But there’s a lot more going on: ASPs are both providing an alternative delivery mechanism (i.e., instead of installing servers and software at the customer premise, providing those applications to workstations over the network), and second, providing applications that are actually made possible by using the network.
There’s been a lot of confusion regarding ASPs in the graphic arts arena, mainly because these companies don’t offer the usual products that companies in our industry have grown accustomed to. They don’t sell printing presses. They typically don’t make shrink-wrap software. They don’t make plate-setters or RIPs.
In the graphic arts industry, we’re seeing ASPs delivering primarily entirely new applications that aren’t possible to provide without the network connectivity in place, both because of cost and maintenance issues, but more importantly because of the collaborative functionality. But it’s entirely likely that, someday, instead of going out and buying a shrink-wrap copy of Adobe InDesign, you’ll simply subscribe to it over the Internet. That’s why ASP is such an exciting concept.
Core vs. Context
As a business person today, it’s important for you to look at what your company is good at, and identify those that will provide value to your customers. Printing companies are really good at putting ink on paper.
But printing companies don’t make that ink and paper. They know how to buy the ink and paper, and that’s a core competency. But making the ink and paper wouldn’t add anything to the printing company’s bottom line. In fact, it would be costly and complicated.
Over the last few years, most printing companies have also gotten really good at digital imaging, to facilitate putting that ink on the paper. But printing companies don’t typically create applications like Quark or Adobe Photoshop. Why? Because doing so is not a core part of their business. It’s easier to go out and buy those applications and put them to use to drive the core business.
Most small and medium-sized companies these days have outsourced their payroll to companies like ADP. Why? Because they are better at keeping track of the taxes and deductions and things like that, and make the process much less labor intensive for the accounting department. Accounting can then focus on areas that will drive the bottom line, like purchasing, cost of goods sold and controlling expenses and generally looking at the bigger picture.
How does this relate to ASP and the graphic arts industry? It’s simple: installing and maintaining computer equipment and software, networks and applications are not core functionality to the business of a printing company.
What are appropriate applications for ASPs?
ASPs are basically providing the same type of service to printers that a company like ADP does, or perhaps even an Adobe. But again, we need to get away from the thought process that so many in the graphic arts believe, and that is ASP is are e-commerce companies. ASP goes far beyond e-commerce.
Today, providers can deliver a wide variety of applications, including collaboration tools, proofing tools, even Page Layout and Imaging functionality.
Why not build it yourself?
I’ve been to some printing companies where they are lucky to have some very ingenious software and systems people. But in recent years, it’s become harder for our industry to attract and keep people with these skill sets. The norm in our industry is to not have an IT department at all, but instead depend on the good will of our best Mac guy or an estimator who happens to like to tinker with PCs as a hobby.
This means that we’re basically putting our company in the hands of a non-professional for mission critical, information age tasks that are increasingly valuable to our company. And this means that the company is forever going to be in reactive mode vis-à-vis technology, as opposed to having a technology and application strategy that will move the company ahead.
If you do have a real IT staff, you’re probably a good sized company, but, even though there are dedicated resources, you’re probably finding that they are still busy just keeping your basic functions up and running, again because these are viewed as support functions – not core business operations.
In order to build the kind of systems that ASPs are creating today, you’d have to put together a world-class software engineering team inside your own company. It’s not too far away from deciding to build your own Adobe Photoshop from scratch. When you think about it in this light, it becomes apparent quickly that ASPs actually have a very compelling value proposition for your company.
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