Hostlogic: There's never a good time to go bust

Last week's news of Hostlogic's demise has shocked competitors. This international ASP has given up its head office in Boca Raton, Florida, plus branches in Zurich, Walldorf and the UK. Insolvency proceedings are under way, but that's only half the story.

Customers are dealing with downtime-related image damage, loss of sales and the enormous costs of data loss. Competitors are afraid their businesses have been put in a shaky position because of a single unsuccessful supplier.

Outsourcing applications, data and infrastructure is always a question of trust - and fear. The fear from users is that they'll suffer 'a HostLogic' of their own. It doesn't matter if an ASP manages its affairs badly or if a cable is severed by roadworks - downtime is downtime.

Leading ASPs, for example in Germany, have found in the last few years how hard it is to engender trust in the service provision concept. Although internet data centres - the home of ASPs - have been shooting up rapidly, there are few large reference clients. IT managers aren't working up any enthusiasm for the model.

There are advantages: no worries about lack of IT personnel to look after servers, plus scalability and security standards many medium-sized companies could only dream about. From staff checks with security keys to high availability with database mirroring, everything is feasible and - in comparison with in-house solutions - affordable.

It only proves fatal when a business partner turns out to be unreliable
Working together with competent partners is a no-brainer. Safeguarding against any emergencies makes double sense. Blind trust without control measures and defined service levels makes no sense.

There is no 100 per cent guarantee. And trusting no-one is hardly an option either. When selecting partners, references need to be checked and a company's financial situation put under the microscope. That's nothing new. And no reason not to work with an ASP.