Speculation mounts over Optus' $24M ASP white elephant

Speculation is rife in the channel that Cable & Wireless Optus has allegedly invested $48 million ($US24.4 million) in an ASP (application service provider) system, which sources say has attracted only about 20 paying subscribers to date.

It seems the telco has been attempting to sell Microsoft Office Exchange via an outsourced model for about $200 per month per user, in a combined initiative with Microsoft, courting ASPs to resell the service.

According to some industry pundits, the service currently has three corporate clients and a total of 180 customers, 160 of which are freebies. Sources close to the telco say it is trying to beef up its subscription figures by counting as paying subscribers its own staff who use the ASP model.

Microsoft and Optus declined to comment, either to clarify numbers or the specific applications being offered via the model. However, the telco is planning a launch of ASP-based e-business services within the next two weeks.

Meanwhile, the market is sceptical of the telecommunication sector's success with the ASP model.

"I don't think the telcos will be big players in this market because they don't have the sales channel," says Kent Duston, CEO of ASP, Cavillon. "Consultants and IT resellers are where customers go for their e-business solutions."

Duston says the telco sector's inability to manage partnerships is another major impediment to uptake. "Show me a telco that's doing well with the channel and I'll show you a pig that can fly," he says.

Customers shopping for ASP infrastructure are also expressing frustration at the lack of commercial viability of telco offerings. One IT consultant, who wished to remain nameless, said he was quoted $75,000 per month just to sign up with an ASP system plus an additional $400 per user, per month.

"The [ASP] market is shrinking and there are really shonky things happening because they're so hungry for business," he said.

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