When a software company serving the global medical equipment manufacturing market had to be set up fast, it found application service provision was the only answer. Geoff Lock reports.
Deio, a new software company set up by leading medical equipment manufacturer Datex-Ohmeda to provide its IT service and support world-wide, is a remarkable story. Headquartered in Helsinki, the firm had to be set up fast and be able to provide IT coverage across the UK, Germany, France, Italy and the USA. And according to Tim Wing, global support director for Deio and also IT director for Datex-Ohmeda, the impossible was only made possible by using an application service provider (ASP) and worrying about IT only to the extent of specifying what its new business needed.
The firm was formed in September 1999 from Datex-Ohmeda, which makes critical care and anaesthesia systems, its products being used in operating theatres and intensive care units around the globe. Both companies are part of Instrumentarium, which had net sales in 1999 of eur773 million and employed some 5,100 professionals world-wide.
Getting running – fast
Deio is Datex-Ohmeda’s partner hi-tech software company, and the business exists to develop, supply and support advanced specialist solutions. The market in which it operates is global and, although the company is starting in six countries, plans are already in place for expansion into more – next up being Spain and the Netherlands.
What the firm needed was a mechanism for providing the necessary business functionality to its world-wide operations and its customers – fast. It also needed to find the right tools and techniques, and the expertise to implement them. It decided to go the ASP route principally because it could thus satisfy all its business requirements without the need for a complex and expensive infrastructure of its own. Systems could be used with just an Internet connection. It chose ASP e-know.net.
“My job was to turn Deio into a functioning software company,” says Wing. “The IT functions Deio required included customer services, customer support, manufacturing and distribution, and we needed things to be available at short notice. e-know were able to provide all our requirements in such a way that they can be used anywhere. They do everything, and we have a single point of contact.”
Cost effective and viable
e-know.net is one of a growing number of working ASP’s proving that this model for providing business IT can be cost-effective and viable. Early adopters small and large are now starting to take this route to ease their implementation path. Across industry, enterprises are beginning to consider embedding the ASP-style of service provision into their businesses, and some are seeing real advantages. And they are big.
“From the customer’s point of view there are many benefits,” says David Redwood, CEO of e-know.net. “We can give them non-stop service – 24 x 7 x 365 – for no capital outlay. What they pay is a fixed fee for each user every month. Contracts are for three years, which means that costs are predictable, and the customers can access the service from wherever they are: on the train, in a hotel, or in a different continent.”
e.know.net already has a portfolio of applications. It uses established remote computing techniques (Citrix Metaframe) so that everything runs on its host computers, but customers can connect in to the service from anywhere. It has developed its own specialised software to manage differing speeds of connection without contention. And the company has ‘server farms’ in Telford and Stoke with a fast microwave link between them providing an extremely high level of protection. It has also set up firewalls and military-strength encryption to keep the operation secure, and loads are balanced between servers, but this is invisible to customers – which get a secure and resilient black-box service.
“It relieved the burden of setting up and let us concentrate on the business,” says Deio’s Wing. “We haven’t outsourced our IT: e-know are just hosts. But if we need things to be available at short notice they can do it. We’re no longer faced with the dilemma of finding servers, installing them, then recruiting staff, training them, and getting the systems up and running to support the business. For example, we told them on 12 December we needed the Italy operation to be in place for January 1 2001 – and it was.”
Another long-term burden Deio avoids is maintenance and upgrades. Quite apart from the cost, these can be disruptive to business, and are often extremely difficult exercises needing specialist skills. All these activities live inside the black box and are looked after by the ASP. The company also fosters a sense of community amongst its ASP customers, making help desk information and known faults available to the users, so problems can sometimes be solved more quickly by users themselves rather than through customer support.
“We publish information we learn from our help desk, and try to get users to publish what they learn too,” says Reg Smith, operations director at e-know.net. “We’ve been running help desks for a long time, and we used to measure the movement of a call between desks. But callers want to know when their problem is going to be solved so we now work on solution time. We publish what we find, and encourage users to describe problems and their answers in a knowledge base. Everybody gains.”
The type of technology used by this ASP also makes it easier for dispersed companies to run training sessions between sites, saving time and cutting costs. It makes it easier to fit the training to the people, rather than the other way round. The ASP model is designed to take the non-productive IT load away from customers and lodge it with a company specialising in IT. ASPs themselves should thus be judged on the basis of business services which can be provided, balanced against cost savings and the cost of doing it all in-house.
“We did look at alternatives for all the Deio companies,” says Wing. “We looked at rental, and also the cost of having a server in each location. In the UK, one of the smaller countries, we estimated the cost of setting up and staffing a server to be about £100k in the first year. In fact, all our IT annually is going to come to less than twice that. But it couldn’t have been done in the available time anyway. My job was to turn Deio into a functioning software company, and had I been faced with achieving it in any other way, it just wouldn’t have been possible.”
Author: Geoff Lock