Rent-an-ERP App Now a Reality Among AS/400 Major Vendors

In September, ERP giant SAP (Walldorf, Germany) announced that it will be offering its R/3 system through selected application service providers (ASPs), making the system accessible to end-user companies on a rental basis. Now, two other ERP heavyweights in the AS/400 market--J.D. Edwards (Denver) and Infinium Software (Hyannis, Mass.)--are following up with rental options of their own.

Earlier this year, J.D. Edwards inked a deal with AristaSoft Corp., an ASP, to offer J.D. Edwards OneWorld ERP applications on a rental basis, for a fixed monthly fee. The two companies have been concentrating on offering rental solutions to the high-tech equipment market, where time to market is a critical differentiator, says Gayle Sheppard, VP of outsourcing at J.D. Edwards.

The first customer to rent J.D. Edwards OneWorld through the service is Turnstone Systems Inc. (Mountain View, Calif.), which provides its Copper CrossConnect family of products to DSL service providers for managing copper local loop facilities. Turnstone elected to outsource its enterprise e-business technologies, allowing them to focus on core business operations. "We were outgrowing our PC-based manufacturing and financial systems and needed to replace them with an enterprise solution," says Rick Tinsley, Turnstone's president and CEO. The outsourcing deal provides Turnstone "with the internal resources of a Fortune 100 company," he notes.

Infinium also recently announced that it will offer application hosting services to its customers. Infinium's application service provider (ASP) offerings will enable its customers to quickly and easily access Infinium's business-critical applications over the Web without the associated costs of owning, managing and supporting the applications and their back-office infrastructure. Infinium's ASP will host a customer's full enterprise application suite. Additionally, Infinium will provide other value-added services, such as application consulting and customization to its customers via the Web through Infinium's ASP offering.

However, Bob Pemberton, CEO of Infinium downplays the rental aspect of the arrangement. "ASP is about relationships--not rentals," he says. "Our ASP offerings present another opportunity to build a new kind of relationship with our customers that allow us to deliver even more valuable services--not just a new delivery paradigm or ownership model."

One early Infinium ASP customer, Rehabilitation Hospital of the Pacific, is using the service to manage its people, data and systems. "Infinium's application hosting abilities give the hospital an attractive option to easily access Infinium applications, at a fixed price rate per month, without the immediate investment of our own dollars in the underlying application infrastructure," says Craig Yonamine, director of IS for the hospital.

SAP's hosting initiative, under the umbrella of mySAP.com hosting, offers customers the option of accessing SAP R/3 modules through a third-party hosting service. "Now, a customer does not need to buy the hardware, does not need to employ the specialist for system maintenance and does not need to have all the application skills," says Peter Graf, SAP director of technology marketing. "All they need is a Web browser." While SAP will not take on the role of ASP, it will initially configure new customer applications on its own systems, a practice it originally provided in its early days.