ASP is supposed to offer massive business potential, but it is
still to realise the big predictions that have been made for
it.
According to the analysts, ASP is supposed to be a massive
opportunity. Some even predicted it would be a multi-billion
industry by 2002, a mere 12 months away.
But the reports back from the frontline don't seem to back it
up. Yuri Pasea, managing director of FutureLink Europe, which
launched an ASP division nine months ago, admitted last week that
the ASP sector had not taken off as predicted.
There's no way I can tell you, hand on heart, that its been a
wonderful success based on analyst predictions. He suggests that
the industry has been a victim of its own hype, claiming that most
of the marketing around ASP has been directed at people in the
industry rather than customers. That said, he's not disconsolate
about it.
Meanwhile, Horizon Technology blamed its investment in the ASP
market for a 35 per cent drop in profits in the six months to 31
December. In a statement, chief executive Samir Naji said "In April
last year the group launched ASP i-Fusion and because this business
model requires significant upfront investment, the group flagged
that initially this would be a loss-making business."
At the same time, Microsoft group marketing director Jeremy
Gittins revealed that Office had not been as successful in the ASP
market as the software giant had originally envisaged, partly
because people seemed more than happy to stick with it on their
hard drive, rather than farm it out to somebody else.
Who are the customers? It had been assumed that smaller
businesses would be the most attracted to the idea of ASP, because
they would be happy to allow someone else to run their IT operation
and free up their limited resources to concentrate on other aspects
of their business. As with so many assumptions about SMEs, it has
proved not to be the case.
Instead, most of the interest has come from enterprise
businesses with plans to deploy one or two applications across 100
seats or more.
The consensus seems to be that as such companies are used to the
concept of outsourcing, they have found it easier to get their
heads around the idea of shifting to an ASP model.
As Pasea puts it: “We’re not offering them something that hasn't
happened before; Smaller companies appear to have taken a much more
conservative approach to the situation, steering clear of any risk
until the concept has proven itself.
Charting a difficult course The issue now is whether the
business drivers are in place, as much as any necessary technology,
to make the ASP case attractive to resellers and their
customers.
Current indicators would suggest not yet. And if the present US
slowdown drifts over to this side of the Atlantic, the incentive to
shift to something new and untested when it's a question of all
hands on deck could be even less pronounced than it is now.