ASP is back, says payroll leader

27 Feb 2006

A Dublin-based technology firm that was responsible for processing up to €5bn worth of salary payments in 2005 for firms across Ireland and the UK has revealed a growing preparedness amongst local firms to adopt application service provider (ASP) hosted software services.

The company, which was previously know as Carapeople, was acquired in 2003 by parent company Northgate HR for an undisclosed sum. With offices in Dublin, Cork and Belfast, Northgate currently has 220 clients in Ireland, including many blue chip customers such as hospitals, health boards, financial services, retail, media and enterprise organisations. Customers include Boots, Marks and Spencer, Anglo Irish Bank, Bank of Scotland (Ireland), Dixons, Ladbrokes and Hasbro.

The managing director of Northgate HR in Ireland, Niall Doherty, told that 20pc of its customer base is now accessing applications on a hosted basis. “Managed services takes up a big chunk of our business as well as traditional bureau services. Some 20pc of our customers access their services on a hosted basis and this is rising all the time.”

The ASP model was promoted heavily during the dotcom boom around 2000. The idea was that firms could access rented software applications such as payroll via the internet and both the software and vital data would be stored offsite within a secure data centre. Due to the fact that at the time target customers didn’t have broadband the ASP model lost momentum.

However, CRM firms such as held fast to the ASP principle and are now a huge success. Other players such as SAP are returning to the fray with their ‘on demand’ hosted model. On Thursday, IBM announced new resources to help application providers develop and deploy business solutions to be delivered as services.

Research firm Pacific Crest estimates the market for hosted software will grow 25pc a year to US$10bn by 2009.

“ASP was a real buzzword at one stage,” recalls Doherty, “but the companies didn’t invest in the technologies required because they weren’t there at the time. This has changed. Payroll is one of those applications ideally suited to the ASP model. Clients simply log onto our servers, view their data and then transmit it to the bank. They don’t have to invest in IT or hardware; all they need is an internet connection and a computer.”

Doherty said that Northgate recently invested more than €2m in new IBM P-series storage area network (SAN) servers for hosting payroll applications.

He said that another advantage of hosting is that it facilitates businesses to stay running in the event of a disaster as key data is stored offsite.

Northgate itself had a recent brush with disaster recovery (DR) in action when its offices, located adjacent to Shell’s UK refinery in Hemel Hempstead, were obliterated on Christmas week in what was the largest explosion in peacetime Europe. A disaster recovery system kicked in and some €5bn worth of payroll still arrived in people’s accounts in time for Christmas.

“We had DR in place with a SunGuard system and an hour after the explosion the full disaster recovery project kicked into motion and systems were up and running within 24 hours,” Doherty said.

By John Kennedy