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ASP market gains momentum

The ASP market is garnering steady support and success stories according to research group Ovum, which predicts the ASP solution rental market to be worth $49 billion by 2006.

The ASP market is garnering steady support and success stories according to research group Ovum, which predicts the ASP solution rental market to be worth $49 billion by 2006.

A report by Ovum reveals that ASPs are set to overcome the current dot-com downturn as customers begin to recognise the benefits of using application software as a network service. “Some of these benefits, such as the ability to reduce the capital investment required to implement a new system, become especially attractive as economic conditions get tough,” states the report.

Network operators are in a prime position to capitalise on the expanding ASP market with Ovum predicting they could benefit in four areas; firstly providing ASP services to end customers, secondly providing ASP services on a wholesale basis to other service providers, by providing transport, connectivity and other enabling services to the ASPs, and finally by aggregating multiple ASPs’ services at a single point of access for end customers.

As Ovum predicts the healthy future for ASPs, IDC has revealed that ASP implementations generated an average five year return on investment (ROI) of 404%.

A report by IDC found that 44% of the participant companies had experienced ROI of more than 100%, while 12% reported an ROI in excess of a 1000%. While the average payback time for an ASP solution was 1.33 years on an average total investment of $4.2 million.

“The ‘return’ in return on investment will mean something different to every company,” said Meredith Whalen, VP, ASP & Internet Services, IDC. “Quantitative and measurable benefits provide proof of success; however, ASP customers frequently cite peace of mind, an ability to focus on their core business and a better work environment as valuable benefits of working with an ASP.”

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