BY JENNIFER KULA

You are one of reportedly 5,000 U.S.-based ASPs. Funding is secured for the next 18 months. You have targeted your niche market. You have shored up your service offering and you have a quadruple X certification on your service delivery via your data center and network providers. The doors are open for business. But where are the customers to sign up for your service?

Do you turn to your sales team or product marketing team to find the answer? Or, perhaps what you really need is a world-class partner and a distribution channel to boost your business and drive revenues? Much has been said of partnering over the years. It has survived its own revolution. From co-marketing, to co-branding, to co-selling, and then to co-product development, it has lasted the test of time precisely because partnering is necessary for facilitating a complete solution for customers in this ever-growing, complex world of technology, products, and services. The question is, which partnering model is right for your ASP business?

PARTNERING ON THE NETWORK SIDE
Enter the network service provider. So just how does this fit into the ASP model? ASPs need a channel to partner with, and what better channel than the network service provider, which already owns the customer relationship and is in search of a way to hold on to its existing customers by offering them an endless selection of applications and services?

The high capacity and availability of bandwidth today are driving demand for valuable IP services - applications and services that enable a better, richer user experience both in the home and in the business. Once a service provider has established a customer base and a physical presence in the marketplace (the land rush phase), their focus must turn to attracting the highest value traffic to their networks. Basic access services must be augmented with personalized content and applications services. To win in this land yield phase, providers must capture the "eyeballs of the customer," and ASPs have an excellent opportunity to fill the need for attractive content and applications.

So which network provider is right for you? This may be broken down into several subsets, however, the best initial question to ask is: How complex is your application offering? Are your services based on pure Web-based applications that are primarily self-service, or are they more complex applications requiring additional support and service to initialize and maintain? Based on this classification you can determine whether you are looking for a pure Web-based distribution channel or for a traditional street-based sales force to assist your selling efforts (or a combination of both).

For those of you looking at the ability to offer your services via a network-controlled Web interface, inclusive of advertising, marketing, and self-subscription capabilities, with or without your brand name attached, you need a network provider with a portal strategy. Not yesterday's portal, but the portal sites that are evolving to assist providers with controlling content, applications, and overall quality and end-user experience. These are private portals designed to retain customers based on the array of service offerings that they will provide. This is where you will find your next distribution channel.

If your application suite is more complicated and requires a degree of professional services, you will need to find a provider with a sales force that handles more complex solutions, and you may even work with some VARs to extend your distribution arm. The key factor is that the network provider owns your customers' end delivery point. You need these relationships to not only distinguish yourself from other ASPs, but also to increase your service reach and drive the margins of your existing solutions. Network providers know the demographics, billing addresses, and usage history of all their customers and are eager to increase ways to collect revenue based on adding value to the current experience.

By partnering with best-of-breed application providers, the network providers are able to offer their existing subscribers additional applications and services beyond basic transport, that they can self-select and self-provision. Through this partnership, the application provider leverages the reach of the network provider and is able to achieve increased revenue, enhanced brand awareness, and an effective new channel for the delivery of its applications and services to subscribers.

CHOOSING THE RIGHT PROVIDER
So, what are the essential elements to selecting a network provider partner from a solutions perspective? The first rule of thumb is, do not create a new business system. Leverage those that already exist in the marketplace. Enhance your offerings with the new technology on the market to facilitate partnering by means of provisioning and service delivery. You should also look for a provider with strong customer support, subscriber management, trouble ticketing, and an OSS system that is flexible enough to incorporate your new offerings. With a partnership, you will be combining the two core competencies of your respective businesses -- network management and delivery, and applications management and delivery -- thereby offering a complete and optimized application service to your shared end users.

The second important rule in executing successful service delivery through a partnership is to identify ways to optimize the service offering to end users. Simplicity, ease of use, competency, and perceived enhancements to current market offerings will assist in attracting new users to your combined service. Whenever possible, become part of an overall services bundle offered by the network provider. End users are looking to streamline the number of providers they are writing monthly checks to and administering from a service perspective. Those network providers with an end goal of becoming a premier access and applications provider to their business and consumer bases will increase the value of your product to the end user.

Third, and perhaps the most important factor in a successful relationship with a network provider is to provide excellent customer service to end users. How will you handle the incoming support requests, call centers, and level one issues? You need a solid plan and a system around your customer support process from the beginning. Remember, users will appreciate new offerings, but it will not be enough to keep them on board without the dedication of both the network and application providers to commit to keeping them as customers.

The market is shifting today for the traditional service provider. The commoditization of network access is driving new models. Look for opportunities to work with partners that will benefit you in increasing both of your businesses, and welcome the next phase of the application delivery model.

Jennifer Kula is director of applications business development for Ellacoya Networks. Ellacoya creates software-rich equipment platforms that harness optical bandwidth build-out by enabling the delivery of value-added broadband application and content services through its Service Generation System.

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