Aberdeen: ASPs making a comeback
- Reduce text size Decrease text size
- Increase text size Increase text size
- Print article Print
- Jump to comments Comment
- Share this article Share
- Email article to a friend Email
The much discredited application service provider delivery model is making a comeback, according to new research from analysts Aberdeen Group.
14 March 2003 The much discredited application service provider (ASP) delivery model is making a comeback, according to new research from analysts Aberdeen Group. The company says that surviving hosted software vendors have refined their message and products, and are now seeing significant interest, particularly from small and medium-sized businesses.
The ASP model emerged in the late 1990s on the back of the dot-com boom. Hundreds of ASP start-ups sprang up seeking to deliver applications over the Internet to dot-coms that didn't have the time - or the experience - to set up their own systems. But by the start of 2002, most had gone bust.
Now, however, according to Aberdeen's forthcoming customer relationship management (CRM) Spending and Satisfaction Report 2003, a growing number of companies are considering switching to hosted applications and those that are already using them are among the most satisfied of all users.
Although only a quarter of the respondents to Aberdeen's survey are currently using CRM delivered as a hosted service, more than half indicated that they would consider using a hosted service in the future.
More significantly, says Aberdeen, when existing users of hosted CRM solutions were asked if they would subscribe to additional hosted CRM services, nearly four-fifths said they would. This finding, the analyst group says, stands in contrast to the industry-wide assumption that CRM customers in general are unhappy; it also indirectly indicates satisfaction with this delivery model.
Although some of the customer contentment with hosted services is driven by the low prices associated with the delivery model, users also cite other benefits, such as fast implementation, easy training, intuitive user interfaces and "a solution that works as advertised".
A number of the surviving ASPs are certainly seeing an upturn in demand. "We almost tripled our revenue this year, but I think we could be having a much better growth rate if we had a better economy supporting us," said Marc Benioff, founder and CEO of ASP Salesforce.com.
According to Aberdeen, the biggest buyers of CRM in 2003 will not be the major multinationals, but smaller organisations with revenues of between $50 million and $1 billion, which bodes well for the ASP suppliers.
