ASPs need to wise up to business challenges ahead



Robin Ford

Opinion

Despite all the debates concerning the applications service provider (ASP) business model, I believe it will...



Robin Ford

Opinion

Despite all the debates concerning the applications service provider (ASP) business model, I believe it will succeed. I share the optimism of Ovum concerning the potential of the ASP business model in western Europe, which it reckons will, in the next five years, to reach levels of $8bn.

However, an element of doubt remains concerning the actual make-up of the model. Surely a true ASP business model is one that provides software as a service, rather than just as a new channel for a product?

As ASPs become an increasingly important part of the total enterprise solution, we find ourselves faced with two different types of ASP - those frantically repositioning themselves as ASPs, and those that are ASPs but don't know it. But putting aside the hype can ASPs deliver?

The availability of Internet technology and its ability to Web-deploy applications to hundreds or thousands of client computers has erratically ignited the ASP business model.

In the rush to be the first to market, many ASPs have sprung up haphazardly and without any premeditated plans.

Even the recent demise of dotcoms has not taught an adequate lesson to aspiring ASPs which still confuse the principle of providing technology with the objective of providing a rich customer experience.

Software provision will only truly become a service when it is complemented by a combination of an understanding of customer needs and satisfaction, relevant information and access to a community of like professionals, that adds value to Web-enabled versions of familiar applications for typical users.

Only once the ASP industry has perfected the solution for end-users will its full potential be realised.

Robin Ford is executive vice-president, sales and marketing, at GraphOn Corporation

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