European Application Management Market Eight Times Bigger Than ASP Market By 2004, According To IDC

AMSTERDAM — OCTOBER 31, 2000 — In recent years, application management has taken on a whole new meaning with the popularity of packaged enterprise application solutions. Application management can reduce the cost of operating and maintaining applications by 25%. But the emergence of the application service provider (ASP) model has confused the marketplace about what application management is. Application management is still overshadowed by ASPs in terms of hype, but reaches far more clients. The latest IDC research shows that application management spending in Western Europe will be around $5.6 billion by 2004, in other words, eight times more than ASP spending in Western Europe.


According to IDC, application management is targeted at large enterprises and ASP at the small business market. "In the mid-market segment, both solutions tend to be similar. In this market, the main issue is the size of the end-user base," said Dominique Raviart, senior analyst at IDC. "The mid-market will offer providers of application management services high-growth opportunities. Such players already have the expertise and the capacity to offer services to the mid-market. ASPs are not in this position. They are still fine-tuning their business model to address small businesses and building up their expertise and infrastructure."

IDC also believes providers of application management are very well positioned to address the mid-market. "The mid-market is huge and is overlapping with the ASP model, a small but very fast-growing market," Raviart said. "To win opportunities in this new segment, application management players will need to focus more on vertical markets."

Application Management – Overshadowed by ASP but More Clients (IDC # RA19G) provides a detailed analysis of the trends in the application management services markets in Western Europe. It includes a market forecast and sizing of the Western European market for application management from 1999 to 2004. The report also studies 12 players in this field and addresses the benefits and the growing demand of application management. This report is available to purchase from your local IDC office.

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