PracticePeople In PracticeFrost & Sullivan sings praises of ASP model

Frost & Sullivan sings praises of ASP model

The European application service provider (ASP) market is still in its infancy. Despite the unrelenting hype, take-up of the model has been slow and firms still eschew it.

But a new study by Frost & Sullivan (www.telecom.frost.com) is sanguine about the ASP arena’s growth prospects, pointing to the ever-increasing number of companies taking the plunge into outsourcing and handing over the hosting and management of core applications to an ASP.

Businesses across Europe have been slower to embrace the ASP model than their US counterparts. However, the increasing awareness of the cost-saving qualities of the concept – normally aimed at SMEs – will herald a surge in investment.

Frost & Sullivan believes that the European ASP market is targeted for considerable growth, with the amount of business generated ballooning from $275.1m in 1999 to $13.74bn in 2005. The ubiquity of the Internet and the accelerating pace of online activity will doubtlessly serve as the paramount driver behind the equally rapid growth of the ASP model.

ASPs are making extravagant claims concerning the cost-saving qualities associated with hosting applications through an ASP rather than supporting applications in-house. ASPs maintain that they can eliminate the burden of everyday IT management, complex licensing issues, and reduce the cost of continuous training and other human resources expenses.

According to Frost & Sullivan, ASPs offer organisations the ability to leverage virtually everything in their computing environments to reach a larger number of users, with a broader spectrum of applications, in more locations and at high speeds. ASPs can minimise the risks, costs and complexities of implementing new business initiatives, while increasing a company’s flexibility to quickly capitalise on changing business conditions and concentrate on core business objectives, it says.

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