Not many dips lately...
Interesting ASP article-
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>CP Business News
>
>Are ASPs the next hot technology trend?
>
>TORONTO (CP) -- Analysts predict the blossoming demand for application
>service providers will explode this year, making investors chase after
>software rental companies the way they flocked to Microsoft competitor
>Linux in 1999.
>
>So-called ASPs are companies that own gigantic, complex network servers
>and enable customers -- many of them e-commerce businesses -- to rent
>software services through private lines or the Internet, freeing them
>from the need for in-house computing systems and staff.
>
>"We believe this is going to fundamentally change the way companies
>acquire software down the road," says Cameron Dow, a Toronto-based
>technology analyst at International Data Corp., who compares the ASP
>phenomenon to leasing a car.
>
>"It's all bundled into a monthly payment customers can afford." His
>company predicts the ASP sector will grow to $200 million next year in
>Canada, while the international market is expected to be worth $20
>billion US by 2003.
>
>Bill Ste. Marie, president of Group West Systems, a Burnaby, B.C.,
>computer systems integrator which has become an ASP in the last year,
>said the market is growing because rapidly changing technology forces
>companies to go through costly regular upgrades of hardware and
>software.
>
>"Applications nowadays are a lot broader and have to do a lot more and
>are on a broader base of technology than they used to be," he explained.
>
>"That leads to a higher cost of ownership and that's why people don't
>want to own these systems any more -- they want to amortize that
>ownership over a lot more users." His customers, most of them clients
>for whom his company used to set up internal computer networks, were
>easily wooed to the new business paradigm where they pay a flat monthly
>fee for a variety of software applications.
>
>"It's not even switching the technology, it's switching the way it's
>delivered," Ste. Marie said. "The fact that the server is sitting over
>here rather than over there at the customer's business makes very little
>difference." Not surprisingly, Nortel Networks, Canada's telecom
>Goliath, already has begun to carve out its niche in the ASP market.
>
>Nortel struck an alliance last month to bundle its network equipment
>with hardware from Hewlett-Packard Co. and software from HP and three
>startup companies. The five firms will sell the packages to Internet
>service providers and other companies.
>
>Nortel has also announced a $200 million US deal to provide
>telecommunications infrastructure for Einsteinet, a German ASP, and the
>company plans to make another ASP-related announcement within days.
>
>This flurry of business is grounded in Nortel's belief that thousands of
>businesses will shift billions of dollars in the coming years from
>traditional computer networks to Internet-based alternatives.
>
>The Brampton, Ont.-based company would profit handsomely from such
>e-business growth because it already supplies three-quarters of the
>telecommunications infrastructure for today's global computer network.
>
>But will companies be willing to give up the security that having an
>in-house system and support staff gives?" The security aspect is a
>fundamental one," said Peter Cellarius of Nortel's ASP division. "But we
>believe it is addressed." Nortel is providing a power structure for
>ASPs which will be virtually immune to system failure, Cellarius added.
>
>"With Einsteinet we're actually building two data centres, so even if
>you were to take out one in a tactical nuclear strike, the other one
>would switch over and continue functioning." If a server crashes, he
>noted, there are many backup servers in place to ensure precious data
>won't get lost.
>
>Gwen Cogshell, director of circulation at Sosland Publishing Co. in
>Kansas City, Mo., said she was initially reluctant to go to an ASP for
>her company's network needs. It meant wiping out a room full of
>computers and letting go of three employees.
>
>"I was accustomed to having the computer equipment and staff in the
>office," she explained. "But with times changing there was no way, from
>a financial standpoint, to be able to keep up with the technological
>changes and stay afloat. This is where the future is." Nowadays, the
>company contracts out all the computer processes for Sosland's
>distribution arm, but Cogshell said she has no security concerns. "I
>don't have any concerns at all. It's worked very well." ASPs might solve
>companies' e-commerce problems, but don't they create a human resources
>disaster? Cellarius believes just the opposite is true.
>
>"There is generally a shortage of good (information technology) staff,
>so it's a question of where those people will fit next rather than will
>they have jobs in the future," he said.
>
>In fact, International Data's Dow added, the lack of skilled technology
>workers is partly fuelling the demand for ASPs.
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