To ASP or Not to ASP?

June, 2005

To some of us in the technology field, ASP means Application Service Provider; to the parking industry ASP could mean "Affordable, Simple, Parking." Software application hosting is gaining wider acceptance in the business community, with companies' IT departments realizing the financial benefits of outsourcing and eliminating the ongoing system management hassles. (See box nearby.)
In today's parking industry, many organizations are facing the same financial and system management issues and are looking for outsourcing solutions to manage their parking financial and statistical data.
With this new off-street ASP solution, many cities and large property owners can now manage their own financial and statistical data without having to teach their IT teammates to be parking experts. By leveraging the access and connectivity of the Internet, financial and administrative professionals can quickly access their hosted applications through the browser on their desktop or laptop with Internet connectivity.
Simultaneous user access to this operational data no longer requires the investment in expensive "client" software that is typically required in other legacy parking software systems. You can now deliver parking revenue and statistical data to the people who need it more cost-effectively than with previous server/client software systems.
Why would you want your host parking system PC located in the parking facility? You need all your financial data available to your financial professionals, not the garage manager.
One other benefit with this technology that can be achieved by your typical parking customer is the scalability of the ASP solution. Too often in the past we attempted to take sophisticated parking software systems developed for a high-end facility and apply it to the "one in/one out" customer -- not a great idea for two reasons: cost and system sophistication.
A typical software solution in the parking industry will cost anywhere from $25,000 to $35,000, excluding the computer hardware to operate these sophisticated parking applications. Although you could attempt to solve the cost issue by significantly reducing the cost of this high-end software system, you could overwhelm the user with far more capabilities than they need, which results in a high level of user frustration.
Do you really need software that generates hundreds of reports, when all you want is four or five to manage your facility? The ASP solution being introduced to the off-street parking market does just that. It allows the end user to pick only the applications and reports they need to run their facility today, with options to "turn on" additional reports or software components as they need them in the future.
Additionally, they accomplish this without the upfront capital expenditure typically required for purchasing parking software systems, and they eliminate ongoing software upgrades, PC hardware obsolescences, data backups, and the technology learning curve required to maintain online parking software systems. Why spend $25,000 on parking software that requires constant upgrades and newer, faster PC's, when you can pay $400 per month and leave the computer system management hassles to someone else?

Let's review the benefits of the off-street ASP model:
1. No upfront capital expenditure for software technology.
2. Eliminates hardware/software obsolescence and performance.
3. Purchase only the components you need for your parking operations.
4. No need for system and database administration staff.
5. Eliminates ongoing operational training.
6. Operating system upgrade obsolescence.
7. Database administration and backups eliminated.
8. Eliminates the need and cost for housing server hardware.
9. Scalability of technology from "one in/one out" facilities to "enterprise-wide" multi-site operations.
10. Allows you to focus on your customer and operations, not the computer technology.

Here's a quick look at the typical cost savings of an ASP vs. purchasing licensed parking software:
ASP Pricing Model *
$400 (per month) x 36 = $14,400
Purchase Price Model *
$25,000
$14,400 / $25,000 = 58% of the initial purchase price of the licensed software.
Note: Models based on a typical one in/one out lane configuration controlling revenue, contract parker access and count using industry-averaged retail pricing.
To summarize, if you are considering the benefits of ASP technology in off-street parking applications, let me offer you a simple analogy: It's like taking a business trip and deciding to rent a car or take a taxicab. I take the taxicab, they do all the driving, they know where they're going, I can focus on the objective of my business trip -- my customers.

Michael J. Hanney is Vice President of Sales at ASE USA Inc.


Sidebar:

What is ASP:
An Application Service Provider, or ASP, is a third-party entity that manages and distributes software-based services and solutions to customers across a wide area network from a central data center.
In essence, ASPs are ways for companies to outsource some or almost all aspects of their information technology needs. They may be commercial ventures that cater to customers, or not-for-profit or government organizations, providing service and support to end users.