The ASP Model Will Shake Up the Learning Industry, IDC Says

FRAMINGHAM, MA – MAY 1, 2000 – The application service provider (ASP) model has made its way to the learning industry, and the learning industry will never be the same. According to IDC, the ASP model threatens to disrupt existing ways of doing business for all types of learning vendors.

"Many learning vendors don't recognize the depth of the ASPs' impact on their industry segments," said Cushing Anderson, program manager for IDC's Learning Services program. "Nearly all vendors will need to participate in some form of ASP solution to maintain a presence in the industry."

With a multibillion-dollar market on the horizon, leading learning vendors, whether they are delivery vendors, content vendors, or service providers, are scrambling to develop ASP market-entry strategies. The ASP model necessitates numerous vendors, partnerships, and alliances to put all the pieces together.

"The ASP model is about forming relationships between companies to form whole-product solutions," Anderson said. "The success of the ASP model in the learning industry will come from partnership networks that are built to include learning delivery vendors, content vendors, and learning service providers."

A difficult part of developing an ASP strategy is sorting through the variables to develop a service offering. In the learning industry ASPs will have to decide on a level of application complexity that ranges from tools and publication, learning content, delivery technology, course management to learning management. IDC advises that scaled-back solutions can provide several advantages, including access to expanded markets, increased service offerings, and reduced partner risks.

"While the market is ripe for developing hosted solutions, the business model carries risk," Anderson warned. "Companies that understand the landscape and potential obstacles will be best positioned to take advantage of this tremendous opportunity."

IDC's new report, Hosted Learning Management Solutions: The Impact of the ASP Model on the Learning Industry (IDC #B21897), analyzes how ASPs will affect the business models of learning delivery, content vendors, and service providers. The report defines an ASP, segments ASP and hosted solutions in the learning industry, provides pricing options for hosted solutions, describes the types of companies that need to come together to form successful hosted solutions, identifies major issues, highlights the implications for potential partners, discusses the value proposition of a hosted solution, and surveys the field to test the model. To order a copy of the report, contact Cheryl Toffel at 1-800-343-4952, ext. 4389 or at ctoffel@idc.com.

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 http://www.idc.com.

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

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