I recall one of the big buzzwords in the computing industry in the late 1990s: “ASPs” or “Application Service Providers.” The idea, which isn’t a bad one, was to take all those applications you find on a typical PC and host them from central locations on the Web. Rather than paying $400 for a copy of MS Office, for instance, you’d just run an equivalent application remotely on an as-needed basis. The cost model was to be based on connection/usage time.

Sound familiar? It should.

The term “ASP” largely fizzled out following the Dot-Bomb bust of 2001/02, but the idea continued gaining steam. As marketers do, they just changed the name to reflect current trends, while avoiding the toxic, oh-all-those-places-went-bankrupt ASP moniker. At first, they started using “on demand” (as in IBM’s “eBusiness on demand”) as a replacement term. It evoked the same sort of concept, while being sufficiently nebulous avoid offering any actual meaning. A marketing dream term!

Nowadays, “cloud computing” is the Next Big Thing. It’s sort of a next generation ASP/on-demand model, and can mean different things to different people. For companies like Amazon and Google, it can mean providing virtual hosts that are totally controlled by individual customers (to the point of having the ability to reboot and rebuild systems to suit specific needs). IBM offers something similar, and of course Microsoft is doing their thing as well.

In general, it all comes down to the same thing: centralizing application and computing horsepower, then charging customers by units of work. C-level executives love this idea, because they see dollar signs (smaller ones, i.e. lower costs) in outsourcing even more IT functions. IT professionals, naturally, see it as a threat. If lots of companies outsource IT management, lots of professionals stand the chance of being laid off.

I’m on the fence about the Cloud/on-demand/ASP model. On one hand, centralizing this sort of thing is an excellent management strategy. I recall taking all my university’s high-use applications and moving them to dedicated application servers (with licensing management built in) — a move that saved us massive amounts of time when performing upgrades. On the other hand, network and vendor availability become ultra-critical in a cloud/on-demand environment. If the network goes down (or has insufficient bandwidth) you’re going to be in trouble. Likewise, if your Cloud vendor’s site goes on the blink.

You may want to think hard about the meaning of the term SPoF before you, or your company decide to make this sort of business decision.