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Same Old Thing

An occasional weblog of a software developer.

Friday, March 12, 2004

Outsourcing and Services: Part I 

Today I was thinking about the way services are built nowadays.

Once upon a time, it was the case that you bought into a vendor's platform, and that was it -- everything you did was with that system from that vendor. If you needed to do something else, your options depended very much on how big a customer you were. If you were a big customer, the vendor would often be able to everything for you. Alternatively, an outfit partnered with your vendor might be able to supply you with you what you need. Quite often, though, you'd have to go elsewhere. In fact, it wasn't unusual for a company to have systems from a variety of vendors, each performing a different role completely separately.

Then internetworking got popular. Everybody had to support TCP/IP in some way or another. Systems had to talk to each other. In some cases, talk to each other just meant that you could send mail from one system to another - but in many scenarios that was enough. After all, the administrators just needed to monitor systems most of the time.

Over time, the level of integration increased. It's not uncommon to have a front-end Windows application which talks to a middleware server running on Solaris which itself is using an AS/400 for the database work.

But this is just in the enterprise. While all of this has been going on, there's been a slow and steady push in the direction of outsourcing. Not because of any technological need, necessarily, but outsourcing departments is the flavour of the day. In certain respects, it can make sound business sense - after all, why employ and train a team of desktop support technicians when it's cheaper and just as effective to employ the services of another company who does nothing but desktop support 24/7? In other cases, of course, it makes less sense, and it can just be a means towards pushing the share price up.

Outside of the enterprise, there's a world of different services. Without trying, I can sign up for web and e-mail hosting, domain registration, instant messaging and telephony, and that's without going into the range of goods I can buy online and have delivered to my door. What ties all of these services together, though?

These days, re-branding isn't a dirty word. In fact, in some arenas it's the de facto standard means of doing business. It's certainly rare for a domain names reseller to actually provide the web and e-mail hosting services he offers. More often than not, the reseller will tie all the services together into a package and offer them to me at an attractive price.

This isn't really tying services together, though -- not from my point of view. As somebody looking for services, it means I have more places to look; and potentially more good deals to miss. While I can get a good deal on web hosting and .com domain registration from reseller A, I can get a better deal on e-mail hosting and .de domain registration from reseller B. I could go to both -- provided I knew about both deals. What I can't do is get both in one shot, though.

The big guns have started to recognise this. The likes of BT, Yahoo!, and so forth, are all trying to turn themselves into "one-stop shops". Similar to the way that ISPs all launched their own (fatally flawed, in most cases) portals during the .com boom, the large service providers are now doing a spot of product integration themselves. In some cases, they already had the products and services as part of their line-ups before, in others they can re-brand what they don't have. At the end of the day, however, this isn't any different to my reseller A vs. reseller B. problem - it's just that A and B now have much bigger portfolios.

Microsoft went some way to attempt to solve this by introducing Passport. A single sign-on service licensed to third parties. You want your e-mail? Login with your Passport. You want MSN premium content? Login with your Passport. You want to bid in an eBay auction? Login with your Passport. The great thing about Passport is that it works - to a point (more on this in a moment). The bad thing about Passport isn't remotely technical, it's simply that the reputation Microsoft earned for itself throughout the 1990s has meant that third-party take-up of Passport is limited, at best. My favourite domain reseller doesn't use Passport, for example. My telephone company doesn't use Passport either. My favourite supplier of Compact Flash doesn't use Passport.

Passport has its limits, though; partly by design, perhaps. I don't login to Passport -- I login to a service which allows me to use my Passport to authenticate myself. As such, Passport becomes pretty transparent, which the service providers love (they don't want Microsoft to get the glory for their hot new service). The downside to this is that although Microsoft has a catalogue of service providers who use Passport, logging into the Passport site itself gives you little more than the ability to update your use profile. No catalogue in site. No list of the services you're signed up to, or the status of these services.

For example, consider the idea that ABC Domains of New Zealand (I don't know if ABC Domains of New Zealand actually exist - I'm using the name for example purposes only) use Passport for authentication. On most Passport-enabled sites, you still actually create a separate user profile on the site itself - Passport is simply an authentication shortcut. Presumably, this is to allay fears of data sharing and so forth, but it's an area where the transparency of it all unfortunately breaks down. Once I've associated my Passport with my ABC Domains account (as part of the signup process), I can use my Passport to login to ABC Domains. Similarly, I can use my Passport to login to MSDN Subscription Downloads and to MSN Messenger and to eBay. And that's it. That's as far as it goes.

What I can't do is open my browser and see -- on a single page -- that I have a domain from ABC Domains which is due for renewal soon, also that there's been three new downloads added to MSDN Subscription Downloads and that as a long-time user, I can get 10% off the fees for my next auction on eBay.

Why can't I do that? All these services are separate - sure, and each has distinct branding. Naturally, the owners of the brands don't want to dilute them by making them all appear as Passport Services. However, does the John Lewis Partnership feel that the Waitrose store in Southampton's West Quays shopping centre dilutes the Waitrose brand? No. And with good reason -- because it doesn't.

The next logical step for services is integration without brand dilution. Sure, advertise the service performing all the integration. Just like you'd go to a shopping centre and know the name of it, it doesn't mean you wouldn't know the names of all the shops inside it that you like to buy things from. The same applies here - just because I login to Passport doesn't mean that I don't know that I'm buying my domain names from ABC Domains of New Zealand; it just means that I'm grateful to both parties for making my life easier.

What does this have to do with outsourcing? I guess you'll have to wait for the next entry to find that out.


posted by Mo  # 8:29 pm

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