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Gold/Mining/Energy : CGI Group (GIB.A) -
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To: claude who wrote (1588)3/1/2000 10:04:00 PM
From: sPD  Read Replies (1) of 1673
 
The ASP market is another dimension of the small business market, a market that some view as the Internet's new frontier. The theory is that in the first wave, investors preferred tech companies that could make millions with a single corporate contract.

This is changing as millions are now being poured into U.S. startups targeting the small business market. While this market space is enormous, it's also extremely fragmented - not a natural fit for the big IT players, as you suggested earlier.

Focus is now being drawn to this sector now for several reasons:

- corporate and consumer markets have been well picked over

- competition in the retail market is driving margins to the breaking point

- the large companies have established relationships with preferred vendors already.

What we've seen with the Nortel acquisition of Dimension Enterprises is an example of a trend that should accelerate - big IT firms developing relationships with smaller outsourcers and ASP players, whether by acquisitions or by partnership. Both will need each other.

For more information on this subject, the March issue of Red Herring has a special feature on "The Net and Small Business" and is highly recommended - it was the source for much of the above.
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