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Chell Goes Long on ASPs with $30 Million Investment

Canada's Cameron Chell, founder and CEO of Chell.com, gave Australian Application service providers (ASPs) a boost Friday when he announced the launch a U.S. $30 million venture capital fund to assist the growth of start up Internet ASP companies in Australia.

Chell's own focus on ASPs may be inspired by a personal affinity with ASPs, they have after all made him an extremely rich 31 year old, but a greater focus on specific B2B areas of the 'new economy' looks to be the emerging VC trend.

"We believe Australia could -- and should -- become the financial hub of what is going to be a multi billion dollar Asia Pacific ASP market," Chell told an audience at ASPCON 2000 in Sydney on Friday after announcing the US $30 million fund. Chell.com balks at the "incubator" title, preferring "strategy bank," to describe its stable of ASPs.

In the Australian ASP market Chell believes those with local market dominance (read Telstra Corp.) will eventually win out but ". . .there are still huge opportunities for smaller companies in Australia. The key to success for smaller companies, here, as everywhere else, is going to the ability to move fast, gain market access -- and venture capital," said Chell. Looks like he might have a little trouble fulfilling the Chell mission, "to create rapid growth 'Industry Dominators' with the latest in technology innovation" here.

Forrester Research puts the global ASP market at U.S. $21 billion by 2001. However, Chell and industry analysts feel this figure is on the conservative side. "As I've come to understand the ASP story the potential is enormous," said Hartley Poynton IT&T analyst David Leslie.

With market giants Sun Microsystems and Oracle Corp. working with budding Australian ASPs like Thin Technologies, applications designed to be served up to end users rather than residing on a local machine should become more readily available. The major concern for upcoming ASPs is that software juggernaut Microsoft Corp. has stated it will ramp up its own ASP efforts and still charge usual licensing fees for users of the ubiquitous Office suite of products. The growth of ASPs will have to be accompanied by growth in servable applications unless Microsoft decides to opt out of the potentially huge market.

Chell's own Application service provider (ASP) company, FutureLink Distribution Corp., is listed on the U.S. Nasdaq technology exchange with a market capitalization of around $US1.1 billion. It had a dog day the same day Chell announced the Australian ASP fund, dropping 9.41% to close at $32.



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