March 26, 2001, 2:59 PM — It was an e-commerce manager's worst nightmare. The OshKosh B'Gosh Inc. online store appeared open to customers -- they could place orders -- but the orders went nowhere. The communications link between the clothing retailer and the company hosting its Web site had gone down.
But the nightmare was just beginning. The Oshkosh, Wis.-based company struggled for several days to re-establish contact with its Web server at Digex Inc. in Cupertino, Calif. "The [Digex] facility was secure, and they wanted a two-day notice before anybody could get into it," says Jon Dell'Antonia, CIO at OshKosh. "But how are you going to notify them two days before you have a failure?"
Dell'Antonia's problem was further complicated because OshKosh's outsourcing contract was with Sunnyvale, Calif.-based application service provider (ASP) Pandesic LLC, which had, in turn, subcontracted with Digex for the hosting site and servers. And it was a fourth party -- OshKosh's telecommunications carrier -- that needed to get into the Digex site to repair equipment.
"It was like the Three Stooges and the Keystone Cops combined," Dell'Antonia says. "If I went through the whole litany, you'd be rolling on the floor laughing. But we were not laughing at the time."
The lessons are clear for information technology managers: If you don't ask the right questions up front, you risk paying the price later. Fortunately, managers contemplating moving to an ASP can learn from the experiences of veteran users.
Measure of Success
The Motley Fool Inc. in Alexandria, Va., outsources the running of its payroll, budgeting and other financial systems to USinternetworking Inc. (USi) in Annapolis, Md. Kevin Book, senior director of technology at The Motley Fool, says his own IT experts "went on-site and really put them through the wringer," especially on issues of security, system availability, capacity for growth, data redundancy and technical support.
But The Motley Fool's interest in USi's technology went only so far, Book says. "On their hardware and software platform, we were relatively agnostic," he says. The bottom line for all the questions put to USi was "availability," and The Motley Fool's contract with USi contains quantitative service-level agreements (SLA) and penalties, he says.
If the ASP industry were a mature one, users would just need to specify service levels in their contracts and let it go at that, says Audrey Apfel, an analyst at Gartner Group Inc. in Stamford, Conn. "But it's an immature market. Half the ASPs are going to fail, so you better spend time placing a good bet," she says.