ZDNet UK / News and Analysis / Business of IT / IT Strategy

ASPs set to shed the dot-com blues

By Vivienne Fisher, ZDNet Australia, 18 June, 2002 10:27

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The ASP model is starting to overcome the negative impact of the dot-com era, according to industry pundits. But does it offer enough benefits to tempt time-poor IT managers? ASP offerings provide cost savings in both software and hardware, argues Michael Yap, general manager at electronic documentation company, CrimsonLogic. "The way I see it most people will be outsourcing their requirements -- and that's where the ASP model will come in," Yap said. Yap believes that in south-east Asia, companies are tending towards outsourcing due to a desire to concentrate on their core solutions. A few years ago the dot-com bust had a negative impact, Yap said. He believes that advances in areas such as broadband will encourage businesses in Australia to use ASPs. Rolf Jester, Gartner's chief analyst for IT services, Asia Pacific, descibes the hype cycle that ASPs went through, which inevitably resulted in inflated expectations. Jester said it's not unusual for technologies or business models to go through this cycle, and eventually pull out of it into a "plateau of productivity". According to Jester, what we've begun to see on a small scale throughout the Asia-Pacific region is software vendors, service providers and other companies delivering their applications in an ASP-like way. Jester used the example of a company in Singapore, which he couldn't name, that had a number of solutions it was targeting at different verticals. "Instead of offering it as an in-house solution, the firm is offering it online because it's a trusted name to customers in that industry," Jester said. And the ASP model did offer a compelling business model, Jester continued. "In the past, although users were very attracted to the idea, they laid down stringent but realistic business conditions," he said. These included questioning companies providing applications via the ASP model about who they were, and whether they could be trusted.
Application service providers can save your company huge amounts in capital expenditure, but do you really want to outsource your most business critical functions? Check out the latest developments at ZDNet UK's ASP News Section, including analysis, case studies and management issues. Have your say instantly, and see what others have said. Go to the ZDNet news forum. Let the editors know what you think in the Mailroom.

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