ASPs Face the Challenge of Differentiating Themselves, According to IDC Now Is the Time for ASPs to Garner Knowledge for Future Success

SAN FRANCISCO, CALIF., APRIL 5, 2000 – At IDC’s AppSourcing Forum‰, held at the Hotel Nikko here yesterday and today, a sold-out crowd of application service providers (ASPs) and other industry players absorbed advice on how to profit in the burgeoning ASP market. While IDC has been offering its visionary analysis about the ASP market for the past two years, the company's team of expert analysts supplied fresh data and insights during this inaugural event. According to IDC, key to the future success of ASPs will be their ability to increase buyer awareness and achieve competitive differentiation.

“Who knows about ASPs? Today, virtually no one,” said Amy Mizoras, research analyst for IDC’s Application Service Provider program, during her kick-off presentation. “To support the evolution of the ASP market from a $300 million market in 1999 to a $7.8 billion market in 2004, ASPs will need to educate buyers about the ASP model, and ASPs and their partners will need to form an integrated supply chain for more efficient service delivery.”

In a later presentation, Meredith Whalen, program manager for IDC’s Internet Services and Application Service Providers programs, observed, “Today’s buyers are choosing their ASPs based on the brand recognition of the application. However, as buyers become more aware of what an ASP can offer, we believe service-level agreements (SLAs) will become the leading purchase factor.

The critical importance of SLAs was also stressed during a panel discussion lead by Clare Gillan, group vice president for IDC’s Applications and Information Access research. Gillan noted, “ASPs deliver on the contract — not only does the ASP take responsibility for packaging all the necessary technology and service components to deliver an application-based service, but more and more are offering service-level agreements contractually binding them to performing as promised.”

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at

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