• United States
Senior Editor

ASPs chug along

Sep 22, 20032 mins
Enterprise Applications

* ASPs live on by making themselves more flexible to better respond to the needs of their customers

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Remember application service providers?  Some folks apparently do.

Despite the hype-and-bust frenzy that shrouded ASPs for much of their early life, the market today is quietly chugging along with some large customers such as Staples who are finding that ASPs indeed help them cut costs and eliminate the headaches typically associated with in-house software deployments. According to IDC, companies spent more than $2.3 billion last year for software delivered as a service, and the market research firm expects that spending to reach $8 billion by 2007.

Granted, that’s far less than the $22 billion that ASP revenue was projected to reach by 2003 at the height of the frenzy, but contrary to what some network executives may think, ASPs are not dead. While the market has shifted and consolidated since it emerged with great fanfare in the late 1990s, the underlying premise – that software delivered over a network can cut costs and boost performance – lives on, says our Special Focus author (

The handful of ASPs operating today – Corio, USinternetworking and Surebridge, for example – have made themselves more flexible to better respond to the needs of customers, experts claim. All three manage applications on customer premises, for instance, for businesses unwilling to scrap existing hardware investments.

In addition, ASPs are increasingly focused on using their extensive software expertise to help customers integrate the hosted applications into legacy systems to better meet specific business needs.

Sounds like a famiiar story.  For more on this topic read: