Software for rent: the Application Service Provider wave

Need to use a computer application like QuickBooks and want to access it from work, home or even on vacation? A handy way to do that is through an Application Service Provider.

Not sure what an Application Service Provider (ASP) is? If you’ve ridden a train, gone to Kinko’s or even used a telephone, you’re already using something of an ASP model. Basically, since you probably can’t afford to build out a railway, purchased high-end copiers or laid your own nationwide fiber optic network, you go the route of one of many buying the right to use these services on a monthly or per-use basis.

In the case of software, the advantage of using an ASP is more flexibility and possible less cost.

Tacoma-based ASP offers these subscription-based advantages and more to businesses nationwide. InsynQ – the company’s stock is traded over the counter – launched in 1997.

Joanie Mann, InsynQ’s Vice President of Strategic Alliances, could also go under the title of chief evangelist. She enthusiastically recounts how InsynQ’s staff succeeds by quickly acting on new ideas – what she calls “blue bird opportunities.”

Joanie took some time out to explain the fine art of being an ASP and how businesses can get that “virtual desktop.”

Q: What is your definition of an Application Service Provider?

Mann: An Application Service Provider (ASP) is very similar to an Internet service provider (ISP). We provide the service over the Internet. The application is the program. For example, there are a number of backup services that run over the Internet. There are services such as, which is a sales management application. These are programs which people actually access and run over the Internet. The Internet, rather than being viewed as a big network, is actually a place that is delivering the software that businesses use. That’s essentially what the Application Service Provider model is: providing access to those software products in the form of an Internet-based service.

Q: Let’s talk about your Virtual Desktop. How important is it to your business model?

Mann: The Virtual Desktop, for lack of a better terminology, is what I call “tweener” technology. It’s a bridge technology that delivers exactly the same functionality, the same modality, the same screen presentation that people are already familiar with using.

One of the things that we recognize very early on in the emergence of this Application Service Provider model is that the people who were developing the Web applications have really great ideas, but the fundamental difficulty was that you had to change everything in order to use them. They behave differently, they exist only on the Web, you had to train people and convert data in order to adopt this Internet-based working model. We saw its benefits, but we also saw its barriers.

So we took a lot of technologies that were fairly mature, that had been available for enterprise-class organizations just because of the cost, and we were able to use those technologies to create a service and an economy of scale that could benefit small to medium-sized businesses. From that platform we created the service that we call the Virtual Desktop. Virtual Desktop is literally a Windows workstation to connect to over the Internet from any browser. You log on and – boom! – you have a workstation, complete with your start button and all the installed applications that are in the hosted environment.

The applications that are provided on the Virtual Desktop are Windows applications like QuickBooks, Peachtree, Act, GoldMine or Microsoft Office. We created a service that allows businesses to adopt an Internet way of doing business so they could bring multiple locations together, to let different parts of their company use resources more efficiently. If I am a user using Word on the West Coast in the morning and another user using Word on the East Coast in the afternoon, as far as the business goes, I’m one user using Word. Software licensing can be applied much more efficiently in a centralized delivery model.

Q: Does it turn out to be less expensive for businesses to have access to QuickBooks this way rather than buying 3 or so licenses?

Mann: Typically so. One individual can run one license of QuickBooks regardless of which PC they log into anywhere on the planet. As long as they connect to our service, they have access to all of their data. In our e-accounting business model we allow our accountants to access the data of their online clients, so an accountant can more efficiently license his company’s use of those applications and then provide ready access in real-time to his clients data.

Q: What are some of the applications you offer?

Mann: We have a QuickBooks Pro licensing service where a business can subscribe for around $55 per month. We run the Microsoft Office suite applications. We offer Exchange Messaging. On the accounting applications side we have Peachtree, Microsoft Great Plains and content management software like GoldMine and Act. There are quite a lot of construction-oriented applications, catering applications, property management applications, help desk and support trouble ticketing systems.

Q: Does the individual have to own the license for them to be able to get access?

Mann: Yes. In most cases the application services we’re providing are called “hosted” services which mean we’re managing the application, the environment and data, doing the backup and antivirus protection. We basically represents the IT department for those clients and we are providing their information technology in a better and more cost efficient way than they would typically be able to provide it themselves.

Q: Is it possible to rent the applications and not buy the CDs?

Mann: That is determined by the companies who make the software. Intuit/QuickBooks, for example, says it’s not legal to purchase it and rent it out. A company like Kinko’s purchases a license and then installs it on a computer, but what they’re renting is computer time. They’re not renting out that license. Microsoft has an ASP licensing model where you can rent per user per month Microsoft Office licenses. But not a lot of companies offer rental of their software.

Q: Do you see that happening more in the future?

Mann: That’s a difficult call to make. The pure Web-based providers –, Oracle Small Business, NetLeger – because those applications only exist on the Internet, you can’t buy them. So renting access is the only way they can be sold. But when you look at QuickBooks, for example, it has huge market share. A company like Intuit can see a very big change in their revenue streams if all of a sudden one day they decide they would rent it for $5 per month as opposed to selling all those boxes for a few hundred dollars. It generally changes the way a software provider earns its revenue and can have an incredibly negative impact on a software company. We saw a little bit of that when this ASP model first started to emerge. The rental model wasn’t readily adopted. People wanted ownership.

More information about InsynQ is at The full audio interview will broadcast Saturday, May 17 on KLAY 1180 AM at 11 a.m. or anytime at

Dana Greenlee is co-host, producer and engineer of the WebTalkGuys Radio Show, a Tacoma-based radio and Webcast show featuring technology news and interviews.