ASP DMS's

[RVW]

Dan,

You have defined different ways to describe ASP services but what we are ignoring is the opportunity that ASP brings in other industries, which I am not seeing in the Auto Industry.

Such as:
Monthly user fees
Month-to-Month terms (no long term contracts)
No upfront license fees for software
Offsite inquiry capabilities via the Internet
No hardware purchase requirements.
No hardware obsolescence. (Software is updated and enhancements are provided to users without upgrade requirements)
Internet enabled software (imbedded email and web links)

What I am looking for in an ASP is freedom!

It is nice to have the option of a single source for the DMS, LAN, Maintenance etc. but the reality is that it is much cheaper for me to own my LAN and purchase the hardware from whatever supplier I choose. PC suppliers and LAN hardware is cheap and getting cheaper.

What I really want from a DMS supplier are the core applications (Parts, Accounting, Payroll, Service and F/I) provided through the Internet. This way I can leverage the expense of my T1 line that I currently use for my Internet connectivity with my DMS services. Is this an option with ADP?

This ideal DMS supplier would also work cooperatively with any other software supplier (CRM, leasing, web services etc.) and openly exchange data through a standardized API where my data resided on a commonly known database such as Oracle or Microsoft. I want to own my data and share it as I see fit. Proprietary databases are the Stone Age but are still used by the major DMS suppliers.

Additionally my ideal DMS supplier will have Internet capabilities at its core. I would like to see a system where all applications automatically interface with my web site. Email on every desktop that is integrated and part of the core DMS as well as the ability to run reports to Microsoft office applications such as Excel or Word without special workstations or download software. I would like to see the screens incorporate the same graphic (GUI) look and feel as my pc software applications so my new non-automotive employees can intuitively navigate with a mouse.

The problem that I see is that large suppliers like ADP and R&R and others dont want to loose the revenue they derive from selling the whole enchilada. It is not in their economic best interest to allow dealers to manage their data processing requirements using best of breed for hardware and software
Theoretically would like to peel back my current bill from my DMS provider to only the software component (approx. $2500). What I am seeing is that the ASPs being offered want to make up for the loss of hardware revenue by selling me on the fact that they are providing extensive services that justify a price that is similar to my in-house system.

The sad reality is that dealerships are complicated operations that require specialized software. Only a handful of systems exist that adequately handle a dealers requirements and these systems were written based on technology that existed 20 years ago.

In addition, Manufactures have helped to paralyze the data processing evolution in dealerships by making it difficult to communicate with their systems (DCS).

Until dealers start demanding technology standards that corporate America has enjoyed for over decade then the large DMS vendors will continue to have their way with us.

[Matt Parsons]

RVW, I could not agree more!

Standards are the key to unlocking the IT side of automotive retailing. The good news is that there is a glimmer of hope here. There is a group called STAR (Standards for Technology in Automotive Retailing) that is addressing this exact issue. They have assembled a consortium of players from OEM's to Industry Groups and IT Providers to develop and adopt standards into this space. The founding members had to pay significant amounts to participate in this activity (of which EDS is one). We truly believe that STAR is on the right track to loosening the tight grip that a few have had on automotive retailing.

In addition to this activity, we announced at a NADA Press Briefing, a new approach to seamless data integration that will allow dealers choice in what systems they use with no concern as to how disparate systems will work/communicate with each other. This activity - called DealerSphere - is a joint initiative between EDS, Sun Microsystems, and the Cobalt Group. For more on DealerSphere including a copy of the Press Briefing materials, visit our site at www.edsarg.com.