ASP Clients Rate Outsourcing Benefits

The Information Technology Association of America (ITAA) has released results of a new survey indicating that customers are “enjoying significant benefits” from their use of applications hosting and outsourcing services, including high return on investment, cost savings, enhanced security, improved infrastructure, emergency back-up, better time to market, and access to new technology.

More than 60 percent of respondents indicated that the level of service provided by their application service provider (ASP) was either “high” or “extremely high.”

ITAA’s ASP committee conducted the survey of current customers in multiple industries. The poll probed issues such as current use, market differentiation, performance metrics and return on investment. Eighty ASP customers participated in the March 2002 survey.

“This survey shows that ASPs deliver a very strong value proposition,” said ITAA President Harris N. Miller. “The data also indicate that customers know what they want from their applications service provider and, based on the high marks tallied here, they are receiving it.”

Customers registered solid approval of the ASP value proposition in the survey. Thirty-nine percent of respondents estimated their return on investment of between 10 and 50 percent, while an additional 14 percent of respondents placed it between 51 and 100 percent.

The data suggest that much of the benefit of using an ASP goes beyond simple cost savings, although respondents said cuts in staff and cost were motivating factors (81 and 71 percent, respectively). Other important benefits included security, improved infrastructure, emergency back-up, better time to market, and access to new technology.

In terms of how customers measure ASP performance, service availability is the most often used factor (74 percent), followed by operational reliability (45 percent) and response time (36 percent). Three out of four respondents indicated that they are currently using an ASP for the first time. Companies expanding their use of an ASP were most likely to do so in areas like database (27 percent), accounting/finance (23 percent) and e-mail/office productivity (19 percent).

A majority of survey respondents fell in the small to mid-sized company range (55 percent under $100 million in annual revenue), although a majority (65 percent) said their firms operate more than one multi-server data center. Another 57 percent said they have been using their current ASP for over one year. Thirty seven percent of respondents described their job title as either “CIO” or “MIS director.”

The Arlington, Va.-based ITAA consists of over 500 corporate members throughout the U.S., and a global network of 46 countries’ IT associations.

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