ASP revenues approached $1 Billion in 2000

Worldwide revenues for application service providers (ASPs) approached $1 billion in 2000.

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By  Matthew Southwell Published  June 10, 2001

Worldwide revenues for application service providers (ASPs) approached $1 billion in 2000. A blistering compound annual growth rate of 89% will see revenues propelled from $986 million in 2000 to almost $24 billion in 2005, according to analysts at IDC.

"Despite the well-publicised challenges facing the ASP market today, the ASP industry is moving beyond the days of hype and producing some real success stories," said Amy Mizoras, senior analyst , IDC's applications and application service providers research. "Our data clearly shows that ASPs are alive and kicking."

The analyst house believes that market growth stems from the adoption of ASP services within large companies and the formation of supplier partnerships.

The United States is the largest market for ASP services and this is not expected to change before 2005. However, Western Europe is being tagged as the land of opportunity for the ASP industry as it is predicted that revenues there will soar from $93 million in 2000 to more than $5.7 billion in 2005, representing a 128% compound annual growth rate.

Although the ASP market's continued growth seems a certainty, it is still not clear which vendors will emerge as market leaders.

"It's generally accepted that software as a service concept will become the accepted delivery model for application functionality. However what is yet to be determined is who will be the dominant suppliers of these ASP services," said Jessica Goepfert, senior analyst, IDC's ASP research program.

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