IDC Provides an Analytic Framework for Assessing “xSP” Service Provider Opportunities

FRAMINGHAM, MA – FEBRUARY 20, 2001 – In response to the growing interest in the xSP business model and the effect it will have on the IT industry, IDC today released the first-ever xSP taxonomy. The xSP taxonomy was created by IDC's analysts spanning services, communications, software, systems, Internet, and ebusiness research areas. This collaboration has culminated in a taxonomy that incorporates the many technology areas and aspects of business and consumer needs that xSPs both rely on and will impact.


According to IDC, xSPs represent a broad range of service providers, offering all types of services including Internet access, applications functionality, and support for business processes. What separates them from traditional service providers and unites them as a group is the underlying service delivery model, which calls for service offerings to be delivered over a network, externally managed, based on a one-to-many business model, and priced on a service-fee basis.

"The creation of the xSP taxonomy reflects important considerations spanning the many aspects of delivering information technology as a service accessible within businesses and the home. Our intent was to develop a framework that could be used by our customers to understand specific service provider opportunities within the larger xSP market," said Clare Gillan, IDC's group vice president of new business initiatives.

Application service providers, Internet service providers, systems infrastructure service providers, and process support providers represent just some categories of xSPs we see emerging today. In the coming months the number and types of xSPs will continue to emerge, adding to the confusion that already exists in the vendor community and among prospective customers.

"All xSPs share a common business model and therefore have many common requirements and challenges. However, xSPs can differ substantially based on the fundamental value they deliver as part of the service offering," Gillan said. "Understanding where xSPs diverge and converge is essential to maximizing the xSP opportunity, regardless of a vendor's entry point. For instance, as many infrastructure providers who targeted ASPs are learning, their investments are easily leverageable to other types of service providers, expanding their opportunity and return on investment. Understanding the similarities and differences among xSPs can also help prospective clients zero in on the xSP that will best meet their needs."


Recognizing that xSP services are rapidly emerging to serve various needs across all types of industries as well as in the home, IDC created a special interest group (SIG) within the company to study the xSP business model. The SIG consists of research VPs, directors, and analysts from across IDC's many research areas. The group was tasked with designing an xSP taxonomy that represents all xSP opportunities, is easy to communicate and understand, and is flexible enough to accommodate emerging xSP markets. IDC created the xSP taxonomy so its clients would have a tool for easily identifying xSP directions and complementary opportunities. The taxonomy has been adopted across all IDC's research areas and regional offices ensuring IDC clients have access to globally consistent analysis and projections.

Report Availability

IDC's new report, IDC's xSP Taxonomy: Putting "x" Service Provider Opportunities in Perspective (IDC #B24024), presents IDC's xSP taxonomy and reviews opportunities and challenges xSPs and their partners will encounter in each of the following areas: IT services, communications, software, systems, and Internet and ebusiness. This 35+ page report also presents definitions and visuals explaining different categories of xSPs. It available at for $99.00. Members of the trade and business press may alternatively contact Hillary DeMello at to obtain a copy.

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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