Brief: Bumps Seen for ASPs

FRAMINGHAM (08/14/2000) - The worldwide application service provider (ASP) market will hit $25.3 billion by the end of 2004, but some early adopters and providers will be burned along the way, according to Gartner Group Inc., a research firm in Stamford, Conn. "We see the beginning of what Gartner calls the 'Trough of Disillusionment' stage of the market," says Audrey Apfel, Gartner research director. "What generally happens . . . is vendor consolidation, market restructuring, resegmentation and the renaming of the market."

There are 480 retail ASPs, according to Gartner. By the end of 2001, Gartner predicts 60 percent will fail or be gobbled up by competitors. Gartner believes those that survive will concentrate on delivering business services rather than just applications.