ASP slow to take off in Australia

The local ASP (application service provider) market is yet to exceed the "meagre" proportions of its first stages, according to industry analyst IDC. However, it doesn't mean ASP is dead, says the researcher.

According to a recent report, the ASP services market in Australia was worth less than $8 million in 1999. The report said local ASPs faced unexpected challenges that had stunted the growth of the market in general.

ASPs too often experienced difficulties developing effective infrastructure connectivity with partnering companies, product offerings, and channel structure, the report said.

Furthermore, an unanticipated lack of general market awareness of the benefits inherent to remote application hosting inhibited the growth of many ASPs, the report said.

However, the researcher said almost all ASP enterprise customers were "satisfied" with the ASP model and with the quality of service provided by their respective ASPs. Most ASP customers considered service costs entirely justified, IDC said.

IDC said current revenue records did not accurately reflect the likely take-up of ASP services in the future because most application hosting arrangements were still in their trial, or pilot stages.

Ultimately, IDC predicts a wider than expected diversity of customers and services in the ASP market. The researcher said likely products to be accessed from remote locations in the future would include CRM (customer relationship management) and ERP (enterprise resource planning) software, "mass market" Web business applications and mainstream personal applications.

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