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ASP Awareness High, Usage Low

While most businesses worldwide know about the ASP model, few are using or plan to use the services of an ASP, according to initial initial results from a multi-phase ASP tracking survey commissioned by the ASP Industry Consortium.

"As an industry and as a Consortium, we've been very successful with regard to creating global market awareness of the ASP model," said Paula Hunter, chairman of the ASP Industry Consortium. "What we need to do now is take that educational mission to the next level and focus our attention on illustrating for end users the compelling value proposition presented by ASPs."

The study, to be conducted in phases throughout 2001 by PMP Research of London at the direction of the Consortium's Research Committee, includes thousands of interviews in 17 countries to address both the end-user and vendor sides of the industry. This initial phase involved 1,983 interviews with representatives of businesses throughout Australia, Belgium, Brazil, Canada, France, Germany, Holland, Hong Kong, Italy, Japan, Mexico, Norway, Singapore, Spain, Sweden, the UK and the USA. The complete Phase I report will be officially released in early July.

In it, respondents were asked a series of questions to gauge their business type (number of employees, industry sector, etc.), awareness and usage of ASPs and their attitudes toward application outsourcing and ASPs. Among the most significant findings were:

  • Nearly 70 percent of respondents indicated unaided awareness of the ASP model.
  • While only 8 percent of respondents indicated that they are currently purchasing or renting applications from an ASP, just over 23 percent expressed a likelihood of purchasing or renting applications from an ASP in the near future.
  • No huge differentiation existed between regions globally with regard to awareness and willingness to utilize the ASP model. Likewise, awareness and willingness appear consistent among both business types and business size.
  • Nearly one quarter of businesses are already outsourcing applications in some fashion, creating fertile ground for the growth of ASP services.
  • Finally, the leading reasons indicated for not using an ASP were "the wish to keep IT in-house," "no business case" and "not yet considered."

"Reading these results carefully, it's the reasons for non-adoption that give us a clear indication of where our educational efforts need to focus," noted Hunter, who is also chief market strategist for Xevo Corp. of Marlborough, Mass. "The numbers tell me that a compelling case has yet to be made for customers, and when it is, we will see a steady increase in ASP adoption rates."

To that end, the Consortium is discovering and highlighting ASP customer success stories in a variety of ways, including its 2nd Annual ASPire Awards competition, through its web site and in other public education vehicles.

"There's no better way to convince a customer of your ability to help him than by showing him how you've done just that with other customers," Hunter said. "We've just elected a new Board of Directors and slate of officers for the ASP Industry Consortium, and we've hit the ground running with a goal in mind of demonstrating the value of ASPs throughout the world."

The initial phase of the PMP Research study was designed to learn where awareness of ASPs was highest, and to create a benchmark by which ASP buyer trends can be effectively measured in future phases. The second phase, the results of which are expected later this summer, will include more in-depth interviews with respondents to delve into some of the technical and business issues involved with the ASP purchasing decision, according to Barbara Adey, national manager for Cisco Systems - Canada, who chairs the Consortium's Research Committee.

Simultaneously, research is being undertaken in which ASP vendors are being queried to ascertain, among other things, the types of companies becoming involved in the ASP sector, the applications being most commonly offered and the partnerships developing amongst ASP-related businesses, Adey said.

The full set of reports will be offered to non-members of the ASP Industry Consortium at a cost of $35,000.