Peter et al., and interesting news release on ASP (application service provider) for software leasing. Does anyone know if NOVL has any intention of getting into this business? SAP, PSFT, ORCL, MSFT, T, CSCO, and IBM (Tivoli) already have made some alliances/investments with ASP businesses. TIA, QuadK
+++++++++++++++++++++++++++++++++++++++++++++++++++++++
IDC Expects Exploding ASP Market to Reach $2 Billion in Revenue by 2003 -
ebaseOne to Capitalize on Astonishing Market Growth
June 4, 1999 08:32 AM
HOUSTON--(BUSINESS WIRE)--June 4, 1999--
'Why buy when you can rent' approach enables small and midsize companies to take
advantage of high-end software applications without large up-front investments
Houston-based ebaseOne EBAS , a rapidly growing company in software leasing for
small and midsize companies, believes that the Application Service Provider (ASP)
market may well represent the largest growth potential in the high-tech marketplace.
According to International Data Corp.'s study, "Worldwide Application Service
Provider Forecast 1998-2003," IDC predicts that high-end Internet-based application
services will grow at an astonishing annual rate of 91% to $2 billion by 2003. And
according to Forrester Research, FORR , the market for packaged application
outsourcing services as a whole will reach $21 billion by 2001.
"The ASP industry is exploding, because it solves all of the major financial problems
typically associated with high-end software applications. For the first time, even small
and midsize businesses will be able to afford almost everything up to the most complex
enterprise-wide software applications," says John Frazier, president and CEO of
ebaseOne, Inc.
ASP software hosting, also called "software rental," allows companies to access
applications that are stored on central servers. In the past, companies were forced to
purchase one-time software product licenses that were either based on the number of
seats or the size of the company. This presented a major problem, especially for small
and midsize businesses that have not been able to afford the significant up-front cost
required to purchase the software. Additionally, companies then had to contract for the
necessary professional services to implement those applications, including consulting and
training services.
"Our business model changes all this. For a flat monthly fee, corporations are able to
lease all types of software, from sales force automation and customer support to
accounting applications. ebaseOne also provides additional services, such as security,
Internet access management, back-up and data redundancy. This allows our customers
to rent experts on an as-needed basis and eliminates the necessity of maintaining a large
internal IT-staff. For the first time, small and midsize companies can actually afford
top-notch technology and IT professionals without large up-front investments or the high
risks associated with unpredictable additional expenses," explains Frazier.
According to Bear, Stearns & Co., this subscription-based business model can easily
become the dominant enterprise application business model in the middle market. That's
why all the major software companies are betting big on ASPs. For example, according
to ZDNET ZD , Oracle ORCL has set up a $100 million fund for fledgling ASPs. In
April, Peoplesoft PSFT announced that it was making an equity investment in Corio, a
start-up Application Service Provider. In March, German software giant SAP SAP
signed an outsourcing deal with EDS EDS .
ebaseOne is limiting the number of its business partners to ensure a strong focus. At
present, they include companies like Microsoft MSFT , Cisco CSCO and Tivoli - an
IBM-owned IBM company. Even though ebaseOne is only now entering the ASP
market, it has a successful track record working with many of these companies in the
past. For example, ebaseOne has been Tivoli's number one business partner worldwide
in sales of its IT Director software.
Even though the subscription-based model is fairly new to the software industry, it is the
very cornerstone that successful Internet companies are built upon. In fact, America
Online AOL is the best example of a subscription-based technology company.
"In AOL's model, users pay a monthly fee for the right to access AOL's content. In our
model, companies pay a monthly fee for the right to use applications that are also
delivered via an Internet connection. Global connectivity via the Web, which is now
cheap, fast and secure, is a key driver of this trend," says Frazier.
Last month, the ASP Industry Consortium was founded to promote the industry by
sponsoring research, fostering standards and articulating the measurable benefit of the
delivery model. Founding members include companies like AT&T T , Cisco Systems,
GTE GTE , FutureLink FLNKD , Compaq CPQ , Verio VRIO , IBM and Marimba
MRBA
The statements made by ebaseOne may be forward-looking in nature. Actual results
may differ materially from those projected in forward-looking statements. ebaseOne
believes that its primary risk factors include, but are not limited to: the need for
substantial financial requirements; the need to develop effective internal processes and
systems; the ability to attract and retain high-quality employees; changes in the overall
economy; changes in technology; the number and size of competitors in its markets;
changes in the law and regulatory policy; and the mix of product and services offered in
the company's target markets. Merger Communications (Merger) is a media relations
firm employed by the Company. The statements and opinions presented here represent
the views of the Company, not Merger, as the release is based on information provided
by the Company. Merger and the Company believe that all information in this release
has been obtained from sources considered reliable, but can't guarantee that the
statements presented herein are accurate or complete. Merger's compensation for its
media relations services, including preparation of press releases, consists of a monthly
retainer and warrants for the purchase of the Company's stock. Merger may have a long
position in the securities of the companies in which it distributes information to the
media, and Merger may be buying or selling securities in the course of its regular
business.
|
