Research conducted by IDC found that hosted software implementations generated an average five-year ROI of 404% and almost half of the organizations in the study experienced payback within six months.

Application hosting takes advantage of the Internet and economies of scale for the delivery of business applications. A vendor acting as an application service provider (ASP) installs and maintains your business-critical applications at one or more of its professionally managed data centers.

Your employees can then access the applications over the internet. In contrast to the traditional client-server model of implementing and maintaining applications entirely at your own facilities, the application hosting model lets your company run distributed applications without incurring the capital or personnel overhead of a complex computing infrastructure.

With application hosting:

• The programs and data are installed and maintained by the ASP's professional IT staff at its hosting facilities.
• The ASP and its IT staff build and maintain the computing infrastructure hardware, software, security solutions and networking.
• All you need is a web browser and Internet access for each user, so it's easier to make the applications available to many more people in your organization.
• Your employees can access the application from anywhere: home, airports, hotels, or remote offices.
• The entire system ­ software, hardware, networking, services ­ is subject to a predictable monthly fee.

The rationale:

• You can be up and running in much less time than through internal hosting.
• You won't need to hire additional IT staff. The ASP's professional systems application management and support personnel implement and maintain the applications.
• The infrastructure is likely to be more reliable, flexible, and secure than the in-house alternative.
• You can concentrate on growing your business, rather than purchasing, implementing and maintaining software and hardware.

For companies considering application hosting, the cultural, physical and philosophical questions need be considered in order to arrive at a decision that is optimized to the financial opportunities. Within that context, it is often the case that application hosting can produce considerable return on investment over internal hosting and management.

As a key component of its Requirements Discovery Process, Cultura Systems consultants work with prospective clients to analyze and compare the alternatives of internal and application hosting, and in the case of eLearning, online content hosting.