Few businesses see need for ASPs

Security and privacy concerns are not the main barriers to ASP adoption, but more than half of Australian businesses said they see no need, no benefit or no relevancy in using ASP services, according to the ASP Industry Consortium.

Although there is a high level of awareness in Australian enterprise enterprises of what an ASP does, the model still has a low adoption rate, according to the figures provided by PNP Research to the ASP Industry Consortium (ASPIC).

While 78 per cent of businesses surveyed were aware of the term ASP unprompted, only 6 per cent of surveyed businesses in Australia currently used ASP services. Some 54 per cent of businesses that have not adopted ASP services said they saw no business case for it, no benefits and believed ASP services were not relevant; only 4 per cent cited security and confidentiality issues as the reason for not adopting the services.

Security and privacy issues are not the main reasons for the low adoption rate, according to ASPIC.

ASPIC's comments follow the release of Frost and Sullivan's research, which said that security concerns are restricting the growth of the ASP model. Security issues have been the prime reason large organisations avoided ASPs in the past, but for SMEs, budget constraints outweigh security concerns, according to Frost and Sullivan.

However, both ASPIC and Frost and Sullivan are upbeat that the ASP market will be bolstered in the current economic climate, as SMEs with tight budgets will adopt the ASP model in order to keep up with large corporates.

Paula Hunter, president of ASPIC, said the low adoption rate is an educational issue but was positive about its future.

"Capital is tight at the moment. ASPs can offer a way to start IT projects without a large amount of capital expenditure," Hunter said.

Hiring freezes can also prompt companies to outsource, she said.

"A lot of companies can't hire at the moment and yet require new skills. ASPs provide the benefit of experience with a group of collaborative IT professionals," Hunter said.

ASPs are shifting from a company type to a service offering, which will also fuel the market. The consortium expects the service model to be ubiquitous, a de facto choice for application delivery, according to the research.

Microsoft's decision to introduce Exchange as an application service offering is an indication that a lot more business services will become available as an ASP service, which will fuel the ASP market and drive the evolution of the application, according to Hunter.

Large companies that are considered trusted providers, such as telecommunication companies, financial institutions and value-added resellers, are adding ASP services to their portfolio.

ASPIC, which has more than 700 member companies including independent software vendors (ISVs), network service providers (NSPs), ASPs and other sectors supporting the industry from 30 countries, was formed to encourage industry best practice and as a forum for networking to promote the ASP industry.

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