ERP applications delivered to customers through an ASP model are expected to make up more than 70 per cent of the ASP market in the future, according to an ERP expert from PricewaterhouseCoopers (PwC).
PwC this week announced a strategic alliance with Telstra to deliver ERP and CRM solutions to Asia-Pacific customers via an ASP model. Representing PwC's first foray into the emerging ASP market, the deal sees PwC join the growing list of Telstra ASP partners, which includes Microsoft, SAP and Lotus Development.
In the deal, Telstra will provide PwC with internet service provider and telecommunication services as well as hosting services.
According to Chris Bennett, ERP leader at PwC Asia-Pacific, PwC's ASP offering will be an alternate delivery mechanism for customers seeking CRM and ERP applications. He said PwC's traditional model will continue to be implemented.
Under the ASP model, customers can log on to a website and download appropriate applications they need via a browser-based front-end interface, he said. Over a whole ownership contract, savings in the order of 50-60 per cent of current IT costs can be achieved by moving to an ASP model, Bennett claimed.
The service will initially be limited to ERP and CRM applications, an area in which PwC already has a 40 per cent market share, but there are plans to extend into other areas such as internet software and ebusiness applications. "The intention is to look at that if and when the need arises . . . the ERP and CRM applications cover a lot of ground (for the moment)," Bennett said.
PwC's ASP offering will be targeted at small to medium enterprises initially but will also be a viable option for larger organisations in the future, Bennett said. "We believe there is a major need in the SME market, but we also believe ERP and CRM software will be delivered via this model to large organisations three years from now."
Bennett said ASP services will contribute between 10 and 15 per cent of PwC's revenues over the next 12 months and will increase to 50 per cent over the next four years.
PwC currently has agreements with SAP, PeopleSoft, JD Edwards, and Oracle for the delivery of ERP solutions. While an ASP agreement only exists with SAP currently, Bennett said PwC is in discussions with the other vendors to amend the existing agreements to include ASP offerings.