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Investing in Alternative Solutions for Delivering Technology




Feb 8, 2001


Vincent Stehle

Hello all,

This is a group response from a few of us at Surdna. I hope it's not too late to respond to Don Britton's provocative commentary on the utility of Application Service Providers, especially as they relate to the needs of nonprofit community-serving organizations.

At Surdna, we feel that ASP solutions hold great promise, especially for nonprofits. That is why we have provided a grant to support the development of ChangeFrame, a suite of software that will be delivered via subscription by NPower, one of the country's leading nonprofit technology technical assistance providers.

It is far from clear that ASPs will be able to provide all of the benefits they promise. There are technical issues, but also concerns about the psychology of users that must be overcome. Many potential clients may fear placing their data on remote servers, because of security and accessibility concerns. But the potential benefits, particularly for nonprofits with relatively slim IT staffing resources, could be tremendous. That's why we think it's worthwhile investing in ASPs for nonprofits.

The first objection Don raises to the ASP model is that ASP solutions typically deal with a single, narrow issue. But that is not by definition, a problem with ASPs. In fact, one of the chief selling points of ChangeFrame is that it bundles a suite of software for nonprofits, precisely to avoid the balkanization Don warns against.

It may be useful to invite Joan Fanning, executive director of NPower, to respond to Don's commentary, if we would like to hear a more full defense of the ASP model.

As regards Don's alternative scenario, a move "back to the future" where users plug dumb terminals into a mainframe, this did not strike us as a practical or desirable alternative. John Hawkins, Surdna board member and Director of Distance Education for Dartmouth College, offered this view. "This is a repeat of the failure of Oracle's Network Computer, which didn't happen because PC prices kept plummeting and people just weren't interested in ceding their privacy and the power on their desktops to a centralized service. The issues here are the same that you have with deregulation and sole providers. Plus it totally ignores peer to peer computing which I think is a huge area of growth."

Likewise, Jon Goldberg, who manages Surdna's computer systems, questioned this notion of centralization. "I have to admit, I'm a skeptic when it comes to centralized computing for all facets of an organization's IT, particularly when it's done via the Internet. While I agree with the shortcomings of the asp model, I doubt this will make things much better. First of all nonprofits must feel comfortable housing all of their data with a third party. There are security and productivity issues with that. Secondly the Internet does not, in its present state, allow the reliability and speed of a local area network. While this will undoubtedly change over time I think it's a ways off before everyone will enjoy high-quality broadband connections. Lastly, it defies the whole concept of client-server computing which makes use of the client computers' processing power. Given the constantly diminishing price of pc's and increasing speed of pc's this is no small thing."

We hope these observations are useful and timely.

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