Businesses race to replace belly-up ASPs

By Marc A. Songini, Computerworld |  Software

Faced with the sudden collapse of its e-commerce application service provider
(ASP) last summer, Adidas America Inc. was ready to pull the plug on a budding
initiative to sell its sporting goods via the Web.

Instead, Adidas raced to find a new ASP and ended up signing on with a company
that was able to get up to speed quickly and customize a set of enterprise resource
planning (ERP) applications for managing Adidas' warehouse and retail operations.

"This was a migration for survival. Without it, we would have had to shut
down the operation and start from scratch," said Dieter Schoenegger, chief
technology officer at Adidas America in Beaverton, Ore.

Adidas America, a subsidiary of Germany-based Adidas AG, was one of several
companies forced to scramble to replace Sunnyvale, Calif.-based Pandesic LLC's
services after it went out of business in August. Now, as the Nasdaq Stock Market
continues to suffer and more high-tech firms close their doors, others are finding
themselves in the same uncomfortable shoes as Adidas.

Any ASP - indeed, any high-tech start-up - is a likely candidate for rapid
demise within its first five years, said Lew Hollerbach, an analyst at Boston-based
Aberdeen Group Inc. "About 80 percent fail," he said. "It's still
a young industry."

That's why it's always a good idea for companies to have contingency plans
in case they need to migrate data or files from their ASPs to their own systems,
he said. That could mean using a third-party storage company or safeguarding
data on a local server.

Santa Monica, Calif.-based eHobbies.com Inc., another Pandesic customer, decided
to set up its own internal systems after briefly running a storefront on Yahoo.com.
But the process was difficult for all involved, said Chief Operating Officer
Brent Cohen.

"It was like driving a car 100 miles an hour and swapping out the engine
while the car's still running," he said. "It was a disruption, no
doubt about it, but we're doing OK now."

After Pandesic's collapse, Portland, Ore.-based eVineyard had to endure the
time-consuming process - in the midst of the holiday season rush - of retraining
its staff in new shipping and receiving systems that were running on externally
hosted ERP appli-cations from Epicor Software Corp. in Irvine, Calif.

"I wouldn't want to have do that in November again," said Michael
Osborn, vice president of technology at eVineyard. "It wasn't so much the
software but the operations -teaching the people in the logistics centers how
to ship wines. That is something I don't wish on anyone, but we had no choice."

Changing Course

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