Some software companies are now offering Application Service Provider (ASP) setups for dealers. But is it the right choice for your organization? Let’s look at the pros and cons of outsourcing your application hosting versus an internal local/wide area network.

An ASP installation consists of a vendor providing a hosted application that your organization accesses over the internet. A hosted application is whatever dealership software your vendor will be providing for you (i.e. F&I, Dealer Management System, Service Writing, etc.) The vendor provides the software on a computer located at a remote facility, provides a logon id and password for each user in your organization and bingo-bango, you are up and running. This is a simplified scenario, but not overly simplified as long as you have internet access and acceptable computers and printers in place.

An ASP installation will reduce hardware investment to a minimum. You will no longer need a dedicated server or (depending on number of users) your server requirements will be greatly reduced, because your vendor is now providing your high speed server - thereby eliminating hardware obsolescence for your most expensive hardware component.

Operating system (Windows, etc.) expense is also significantly reduced as you no longer have to invest in the higher priced server based software required. This feature alone will save your dealership thousands of dollars in initial investment. In addition, the technical expertise and expense of maintaining your server is eliminated. While you will probably not completely eliminate the need for onsite computer technicians, this need will be reduced to a minimum. Simply put, you will not need a full-time network administrator (i.e. computer technician) thereby freeing a staff member to perform more profitable functions or you may outsource your network maintenance to a local provider.

Multiple remote lots are much easier to setup and maintain. No more T1, static IP, frame relay or other telecommunications will need to be maintained by your staff or an outside consultant. Simple DSL or any broadband internet service will provide all the speed necessary for most dealerships.

Data backups are done by your ASP provider assuring that backups are done regularly and maintained in a secure environment. The only down side here is if you feel the need to lay your hands on backup tapes or disks for comfort.

After all of these pros, what are the cons to an ASP service. First, you now rely on local internet access for all your dealership computing needs. Should your internet service provider (ISP) or phone service (whichever variety) go down, you are temporarily without computing services. Your information is stored elsewhere; therefore you must rely on someone else to maintain confidentiality of your dealership and customer information. The effective speed of your local computing becomes a factor of the vendor’s investment in infrastructure. Should your vendor oversell the capacity of your server, you may have to wait for them to upgrade capacity and speed to see improvement.

We have covered some items to look at when evaluating whether or not to install or upgrade your own internal network or to implement an ASP solution for your dealership. This is not a complete list of factors to consider but a good starting point. Shop wisely by determining your wants and needs and then, of course, select the answer that best fulfills your objective.

Vol 2, Issue 5