ASP model forces vendor sales re-think

The hyped Application Service Provider (ASP) model is forcing vendors rethink their entire sales strategy, and is causing major headaches when it comes to compensating resellers.

The hyped Application Service Provider (ASP) model is forcing vendors rethink their entire sales strategy, and is causing major headaches when it comes to compensating resellers.

At the unveiling of a data-hosting facility in Manchester last week, Hewlett-Packard executives admitted that it was "battling with the sales structure" of the "apps-on-tap" model.Sara Gemmell, eservices marketing manager at HP, said: "We are anticipating a shift in the way sales people are paid. We will start to see our sales force paid on a revenue-stream basis rather than on a payment-per-sale basis."

However, Gemmell admitted that transferring such a model to the channel was difficult.

"The ASP model has a big impact for the channel. The straight installation model is under a lot of pressure," she said.

Gemmell said in the future VARs would either move into the service provider market, as an xSP, or become niche partners, working alongside service providers to provide high-value services to customers.

Reseller and Internet service provider XTML showcased a hosting facility that will shortly offer application hosting as well as network management services.

Eugene Boyle, sales director of XTML, said: "Everything we do cuts across a traditional channel model. By renting hardware and software we are turning what was a product into a service. How does a vendor work with us and how does it compensate staff, systems integrators and service providers?"

Other ASPs claim the model will have a more limited effect on existing channel players, stressing that all that is changing is the delivery method.