That question—and the necessity of asking it—drove decision-makers at a large legal practice to call Andalon, an Amherst, NY-based application service provider (ASP), says Chuck Fried, Andalon’s president and CEO. “The firm had just received a quote for $1.5 million from its systems integrator. And it had steadily lost some 60 percent of its IT people to dot-coms,” Fried explains. The company realized that bolstering its in-house IT capabilities to the extent demanded by its growing needs would divert resources and organizational focus from its core competency—law. So it turned to an ASP for help.

Other Andalon clients have sought out the ASP’s services to stem runaway IT growth. “One client, for example, was experiencing 30 percent growth within its IT department and only 15 percent expansion of its business overall,” says Fried.

In these and a range of similar scenarios, ASPs can deliver significant benefit. Rather than purchasing and maintaining individual software applications or functional suites, organizations simply rent access to them, typically paying on a per-usage or per-seat basis with minimal layout upfront. The ASP manages applications on its own servers within its own (or a partner organization’s) data center, and clients access the software via the Internet or a virtual private network (VPN).