A report published by the Aberdeen Group predicts the troubled
application service provider market will overcome delivery problems
to increase its value from $3bn (£2.11bn) in 2001 to $16bn in
2005
The figures suggest that in spite of delivery problems, the value
proposition offered by the model could be too significant for many
customers to dismiss.
Maxine Holt, a senior researcher at the Butler Group, said, "The
ASP model was overhyped, and vendors over-marketed their products.
CRM and ERP were overhyped, despite being viable business
propositions, and the "one-to-many" model didn't happen.
"However, the industry is picking itself up. Vendors have started
to listen to the customers and are realising that they have to
customise according to the business. Delivering applications via
the Web is definitely the way to go."
The Aberdeen Group figures will come as a significant boost to a
market that has faced a barrage of criticism over recent months. A
recent report from the Gartner Group warned of a major shakeout,
predicting that 60% of ASPs would fail by 2001 with just 4%
surviving through to 2004.
Tony Lock, senior analyst with Bloor, said: "The only issue that
ASPs have had in the past was poor execution. ASP was sold in the
wrong way. There were many problems with delivery, although
potential customers are now beginning to realise that it is not
about saving money straight away. It is about providing a service
economically."
One UK start-up that is looking to the ASP model to deliver a
financial e-business offering to smaller banks and building
societies is Aspace. The start-up plans to offer an interactive
service for around £500,000.