This year will be a turning point for application service providers as they rethink their business models and battle to be among the survivors in the fast-growing market, claims market research firm IDC in a recently released report. We're at the point where ASPs really need to differentiate themselves by offering additional types of services. ASPs will probably focus on customer service or include add-on features such as storage or security components to help them rise above the competition.
IDC analysts believe enterprises this year can expect to find a plethora of ASPs that will design software specifically for the Web, rather than retooling packaged software for hosted delivery. Overall, IDC agrees with other analysts who expect a big shakeout in 2001 as the hype around the ASP model dissipates and companies get down to business.