Have you ever asked yourself why you spend so much time and money installing and upgrading software, not to mention getting it working smoothly on your system? What about then discovering that the PC you thought was more than capable of handling the latest packages has just about ground to a halt, demanding some serious upgrading of its own?

Then there's the ongoing situation of keeping your system maintained, backed up and fully operational. It can be a total nightmare for a single user or someone managing a small business network of PCs. No wonder they fear the day they have to deploy a new application or, heavens above, a different operating system.

However, there is another way. Believe it or not, there's no need to own software at all - you can simply rent it when you need it. We don't mean borrowing a CDRom for a few days, installing it, then honestly removing it after an agreed period. We're talking about outsourcing the whole shebang to an application service provider (ASP).

The ASP buys the software, installs it on its servers, and ensures it's fully operational. The ASP worries about maintaining its system, upgrading hardware and software as required, hunting down nasty viruses and backing up essential data. The ASP answers your technical support questions and sorts out short-term licences.

In short, the ASP does all the hard work, letting you simply connect over the internet and run its programs on its servers as and when you need to, in return for a simple rental fee.

If a co-worker also wants to run the applications, they simply rent them too and start working straight away, without worrying about installations or hardware upgrades. Since the programs are entirely executing on the ASP's servers, your access device could be a modest PC, or even a simple information appliance. Total cost of ownership? Forget it - it's the ASP's problem. Just as if you were renting a house - the cost of maintenance is a headache for your landlord, not you.

Mainframe deja vu
Think you've heard it all before? The ASP concept certainly sounds similar to the old days of mainframes and dumb terminals. This idea went along the lines of having one single powerful machine that contained all your documents and applications. Programs and data were accessed using dumb terminals, which were little more than keyboards and screens connected to the powerful server across a local or wide area network.

The advantage was that there was only one machine to look after, making administration fairly straightforward.

On the downside, the green screens and command-line interfaces of the terminals could hardly be described as user friendly. Then there was the fact that such a system required dedicated IT staff to look after the server and maintain the network - fine for a big company, but not so good for small businesses or individuals.

People needed a personal computer, capable of executing applications by itself. Then in the late 1970s, Intel made a chip, IBM phoned Bill Gates about some operating system he might supply, and the rest, as they say, is history.

PCs are wonderful machines, offering powerful features that are relatively simple to use, but the fact remains they're easy to damage. You only have to consider the impact of emailed viruses to see how vulnerable both individuals and entire workforces are. Even users innocently installing software can cause all sorts of trouble.

Then there's the cost of buying a fully licensed copy of an application for every user who needs it, not to mention the time and cost of installing it and making hardware upgrades if required. It all seems a bit like overkill when you have to buy a full copy of Powerpoint and upgrade your PC to run it even if you may only make one presentation a year.

Cut down to size
There have been several attempts over the years to revive the client-server model of long ago. Failing to make a big impact was the Networked Computer (NC). The NC's greatest supporters were Sun Microsystems and Oracle, which quite rightly realised that we only tend to use small portions of an application at a time.

For example, this article was written in Microsoft Word, but mostly used just the basic word processing functions, leaving spell checking to the very end, and never once touching the sophisticated graphing and desktop publishing tools contained within the application.

In this instance, why bother having the entire application suite taking up unnecessary space on your local machine? Simply download the components you require from a centralised server across a local network and execute them on relatively modest terminals, also known as 'thin clients'.

It's a nice idea, but one that never really caught on. The client devices, which used Java interpreters to run the required components, were indeed 'thinner' (in other words, less sophisticated) than fully-fledged PCs, but with built-in memory and processors, they weren't thin enough to financially tempt companies to make the switch.

More successful is server-based computing that, like the original mainframe systems, entirely executes applications and stores user data on hefty servers (connected by a network or internet 'pipe'), leaving access to potentially simple client devices.

Citrix is the leader in server-based computing with its MetaFrame Independent Computing Architecture (ICA), and MultiWin products. Microsoft licenses MultiWin as part of Windows Terminal Server, allowing multiple users to execute the same applications from a single server, in separate protected sessions.

The user experience is very much like remote controlling another PC, where the server's own desktop is presented in a window on your monitor and controlled by local mouse and keyboard commands. Simply click on the Start Menu of this remote desktop and fire up the applications you require.

The clever bit is that the programs and data are hosted and executed by the server alone, leaving the local client almost twiddling its thumbs. The only data being transferred across the network between client and server is the keyboard and mouse commands along with display updates.

Citrix believes its 'ICA protocol' can carry such traffic over a relatively modest 20Kbits/sec network link, which makes it possible with a modem or even forthcoming mobile data services.

Rather than requiring the local processing power of PCs and NCs, Windows Terminal Server can deliver graphically rich and familiar environments to very simple Windows-based terminals (WBTs), running traditional or embedded operating systems. The WBT client contains only the minimum amount of software necessary to boot the device, establish a connection to the server and present the user interface.

The ASP difference
The two things NCs and WBTs required was a server with a suitable multi-user operating system and a network, both managed by the user. Sadly this excluded most individuals and small businesses simply looking for some help installing and maintaining applications.

An ASP uses the server-based computing model, but the difference is that the network is the internet itself, and the ASP looks after the server. So long as you can get on the internet, you can use an ASP, eliminating the need to build or maintain your own network infrastructure. But since everyone and their dog are already on the internet, why is it we've only just started hearing about ASPs?

The answer lies with your connection to the internet. If you're remotely executing applications over the internet, you'll want a quick connection that's always on, which eliminates anyone who uses modems with dialup accounts. ASPs have, in fact, been in business for several years, but dedicated to companies that can afford the high cost of a leased line permanent internet connection. Consequently their services reflected the needs of such customers.

Many such businesses desire high-end applications and services, such as enterprise resource planning (ERP), ecommerce, data analysis, training, asset management, payroll and salesforce automation. Others want powerful collaborative tools and properly maintained exchange servers, but haven't the time, money or experience to do it themselves.

This is where ASPs are currently cleaning up, renting previously unaffordable or difficult to maintain enterprise-level solutions to medium-sized businesses, as and when they need them. They're also popular with the largest businesses that have realised that outsourcing various applications and services is often cheaper and easier to manage than buying them outright and using a dedicated MIS department to deploy and maintain them.

It's certainly a neat model when a company wants to quickly expand or trial new software before making huge deployment investments - scalability no longer becomes an issue.

Financially the application hosting model works well for both the user and the provider, as each has a steady flow of predictable spending and revenue as opposed to waiting the typical year or two before heavily investing in or delivering a brand new piece of software. The software developers also particularly like the ASP model as the controlled renting of applications effectively eliminates local piracy.

ASPs and small businesses
It's easy to see how compelling the ASP model is for medium to large companies, but what about smaller businesses or individuals? As discussed above, running remote applications over an internet connection really requires a fast permanent link, which until recently has been beyond the reach of most SMEs.

Step forward ADSL (asymmetric digital subscriber line) - now being offered by a range of big ISPs, from BT to Demon. BT is currently sorting out its technical issues with ADSL, and finally delivering always-on connections to the internet at 512Kbits/sec download speed for £40 per month - at least to those UK users who live near the few exchanges that have been converted to support ADSL.

The UK's cable giants are also gradually beginning to roll out broadband cable modem services beyond trial areas, offering similar levels of performance to ADSL at comparable or even lower prices. By the end of this year, affordable broadband (the term for high-speed always-on connections) will be available to SMEs, and ASPs are already gearing up to target this new market.

The ASPs, of course, only license, execute and maintain services - they still need co-operation and support from the software developers. Microsoft has already put a lot of effort into its application hosting strategies, documented at its website.

The new Microsoft ASP Licensing Program allows ASPs to license the company's products on a monthly subscription basis, providing services for a monthly fee to their end customers. Microsoft also operates an ASP certification programme, making it easier for end users to select quality providers.

Microsoft's rentable products are delivered using Windows Terminal Server, which presents a complete remote Windows 2000 desktop in a window on the client's device. Simply click the icons or buttons you require as if they were on your own PC. The ASP will normally also provide some private, secure remote storage space for your documents, the advantage being that you don't need to worry about making sure you've got your files with you when you leave for a trip or work in a different office.

Microsoft products became available on a subscription basis, from 1 August in North and South America, and 1 September in Europe and Asia. At the time of writing, the North and South America services had just been launched, but actual pricing details were scarce for the large number of ASP partners (including BT) listed on Microsoft's website.

It's also thought that the lower price of IT products and communication services in the US may result in cheaper ASP deals than we'll have in the UK. Sadly, despite the internet being the network that delivers the services, it's unlikely that Microsoft's various international licences will allow a US ASP to rent its services to a UK user.

The Microsoft products likely to be of most interest to SMEs on a rentable basis are Office 2000 and Exchange Server. Microsoft claims that Office 2000 was developed to perform at the optimum level in a hosted environment, and apart from modified splash opening screens and non-animated assistants, it's essentially the same suite you get on a standard desktop installation.

After much trawling we found some prices on ASP Personable.com's website, which was renting Office 2000 Standard in the US for $19.95 (£12.50) per month to individuals or $14.95 per month to corporate users.

Office 2000 Premium weighed in at $36.95 per month for individuals or $26.95 for corporates; individual Office components were also available for $9.95 or $6.95 a month for individuals and corporates respectively.

In the UK, BT said prices will start at £4 per month for its Office 2000 ASP service.

Exchange 2000 Server is also an ideal service to be outsourced. An ASP can offer a well-maintained secure service with shared address books or schedules, public calendars and larger mailboxes than you'd like to manage yourself; workflow and collaborative tools can also be well-implemented in this environment. Users access the services using Outlook 2000 from a PC, or Outlook Web Access from any device that can access the internet - great for mobile workers.

Lotus, too, has recently announced ready-to-rent collaborative applications and a hosting platform for ASPs. Lotus QuickPlace handles team collaboration and allows users to share documents and discussions, while Domino Web Mail offers easy access to Lotus corporate email and scheduling information.

Further details on the Lotus ASP Solution Pack are available on its website.

In Part 2 we look at ASP services for websites, investigate Microsoft's .Net vision and examine the fears that people have about using ASP services.