ASPs Refocus and Evolve to Succeed in Turbulent 2001, According to IDC

FRAMINGHAM, MA – JANUARY 31, 2001 – As customer demand accelerates and revenues in the application service provider (ASP) market double in 2001, IDC predicts ASPs will work to adjust their business models to capture this growing market opportunity. Some ASPs of 2001 will look very different as they prepare themselves for the long journey ahead.


"ASPs will seek ways to gain flexibility and focus on what really counts in their business: keeping the customer happy," said Amy Mizoras, senior research analyst for IDC's Applications Service Providers program.

IDC believes that in 2001 a new generation of ASPs will emerge. The earliest ASPs delivered application services around client/server applications, but an increasing number of companies will design software specifically for the ASP model.

ASPs will also enhance their offerings with services. "Customers will look for more than just access to and functionality of the application, and ASPs will find ways to expand and emphasize their services, either around the delivery of the application – such as by focusing on customer service – or through add-on features such as enhanced security components," Mizoras said.

Overall, although IDC expects turbulence in the ASP market in 2001, it believes those that survive the bumpy ride will be presented with huge opportunities.

"Without a doubt, ASPs are in for an interesting ride in 2001. For some, the worst is just around the corner as they fail to successfully execute the model. However, it will be a billion-dollar market in 2001, and for ASPs that understand the market and play wisely, the best is yet to come," said Jessica Goepfert, senior research analyst with IDC's Application Service Providers program.

In its new research piece ASPs in 2001 — 10 Market Predictions (IDC #B23852), IDC discusses issues that will shape the market in 2001. The research piece presents IDC's 10 predictions for the ASP market in 2001. To purchase a copy, contact Jim Nagle at 1-800-343-4952, extension 4549, or at

In addition, IDC has announced the launch of a major research initiative designed to uncover the financial impact of ASPs. The study, The Financial Impact of ASPs, will investigate the common belief that purchasing application services through an ASP can return a high yield as a technology investment. This study will provide sponsors the ability to differentiate themselves in the market by demonstrating to clients an intricate understanding of steps that can be taken to maximize return on investment for ASP implementations. For more information on how to become a sponsor, and the benefits to sponsors that commit prior to March 1st, please contact Christopher Bednarz at 508-988-7553 or

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world’s leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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