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The Bloor Perspective: Coffee gets wired, the ebusiness porn model, and ASP SLAs
In this week's look at three key issues, Robin Bloor and his team of colleagues look at the networked vending machine, the porn industry's e-success, and how to ensure ASP service levels...

By Bloor Research

Published: Tuesday 14 November 2000

There has been much talk of the ways in which the internet will extend the use of IT into homes and offices. Evidence of this new connectivity comes with the announcement that Lavazza and e-Device are working in partnership to install 10,000 web-connected vending machines across Europe before the end of the year.

These e-espressopoint machines will allow individual users to order their drinks of coffee online with full access to all of the usual features of the machine - setting the strength and sugar settings for example. At the same time, the machines will be able to pass on information when things go wrong.

In terms of technology, the solution is very simple. E-Device is a relatively small Franco-American business that specialises in the connection of non-IT devices to IT networks. Its main product is SmartStack software embedded onto a single low-cost chip that can be used by OEMs to connect to the internet. Thus, the chips can be used to connect air conditioning units, security doors, freezers, metres or any device that can use the electronic interface.

The e-espressopoint is a gimmick that will seem fun for about three minutes. It is still necessary for the user to walk to the machine to pick up the drink. Even when you get there, there is no telling which one of the 50 drinks standing by the machine, brewed to different recipes and all going cold, is actually the one that you ordered.

However, the underlying technology here is important. SmartStack offers a cheap way of internet-enabling devices of all types, providing interfaces that allow information to be shared, and allowing management tasks to be carried out. It is the type of product that is needed to boost the momentum of the appliance market where, currently, it seems that development is being restricted by a lack of imagination on the part of OEMs.

*Online porn - more than just desktop penetration*

Approximately $5.1bn of the porn industry's $11bn annual sales is derived from video sales but cable and internet productions are challenging the fundamentals of the business. Since the porn industry established itself, online sales of video, DVDs and sex toys have increased. In 1998, $980m was spent and in 2000 sales are expected to increase to $1.4bn. These figures make the porn market equal to online book sales and higher than revenues from airline ticket sales.

With broadband being rolled out - and with it the opportunity for interactivity - simple video playing will just no longer be enough for the average thrill seeker. Why will anyone settle for anything less than an online lover that obeys their every wish and desire? Live one-on-one porn teleconferencing is where the future lies.

The adoption of broadband as a delivery technology takes money and, as with any other business, pornographers will look for investment. What makes pornography different from any other business is that the very nature of its product means VCs don't come knocking at the door and IPOs are rare.

Obviously pornography attracts the attention of regulators, politicians and protestors - and quite rightly so. For some time the commission for the Child Online Protection Act has been in discussions with industry representatives to find ways to stop children accessing pornography on the internet. The most obvious solution, the provision by the Internet Corporation for Assigned Names and Numbers (ICANN) of the top-level domain .XXX or .adult allowing easy disabling of access to porn sites by schools and employers, was declined. Instead the commission has recommended that schools, libraries, internet and technology companies act voluntarily to address the matter.

How this censoring is implemented has yet to be seen but it will no doubt have a major influence on the public's and the money markets' perception of pornography as a business.

*ASP - are you being served?*

The emergence of ASP as the new rock 'n' roll of IT has made many an old outsourcer's heart beat faster and pockets grow fuller. But for customers it throws up all sorts of new challenges - particularly when it comes to defining the Service Level Agreement (SLA).

The SLA should be a separate document from the contract, although it may appear as a schedule within a contract. The contract should define the commercial and legal aspects of the agreement while the SLA defines what service is being provided.

The SLA should be a clear definition of what is being provided by the service provider and should be written in plain English rather than wrapped up in legal jargon. Aside from keeping it simple, keep it brief too - the SLA should be a flexible working document not a doorstop.

The SLA should define the scope of the service being provided. How many users, how much file space and what applications are available are just a few items to include. The level of support being provided should be specified, documenting what hours and on what days can calls be placed (not forgetting bank holidays, which do vary throughout the United Kingdom).

Once a call is placed, users should know when they can expect a response and a resolution - be careful here as response means a call back and resolution means the problem is fixed. They are different.

Next is escalation. Don't get too optimistic. When things really go wrong, you'll need this.

Service levels should also be included to allow service provider performance to be monitored. Certain service levels should be selected as key performance indicators (KPIs) which will be associated to the risk and reward aspects of a contract. Remember to select meaningful service levels, ones that have tangible impact on the business. The SMART acronym is useful here - Specific, Measurable, Achievable, Realistic and Time-bound.

Next up is service reporting where a service provider hopefully provides documented evidence of what a wonderful job they are doing.

And let's not forget there is the service review meeting where assuming everything is going to plan, you can sit down with your service provider and all pat yourselves on the back for a job well done.