Finding The Perfect ASP Ecosystem

Four ASPs, the latest in a growing line, have penned deals with
communications giant AT&T Corp. and its Ecosystem for ASPs.

The program gives ASPs dedicated hosting and network services bundled with
a co-marketing and distribution program. Qualified ASPs are also allowed
to sell AT&T Internet services with their own application
offerings, perfect for system integrator ASPs.

NetChemistry, helloNetwork.com, BulkRegister.com and NeuVis are just the
latest in a list of ASPs signing up for the Ecosystem, which includes
heavyweights Intelligroup, USinternetworking, Inc., and Mi8.

In January, EcoSystem was launched and the telco has been gathering three
to four companies a month to its data centers. But its the association
with the AT&T name that brings ASPs out in droves, with nearly 30 to 40
inquiries a month.

Sandy Brown, AT&T vice president of data and Internet services, said the
Ecosystem is proving popular with ASPs, who have seen significant revenue
increases.

“ASPs need innovative ‘partners,’ not just providers, to help them advance
and enhance their business models,” Brown said. “In just six months, we’ve
seen tremendous market acceptance — the Ecosystem is a huge success for
everyone. Month over month, our customers are seeing exponential increase
in demand for their services and in turn our own business is experiencing
tremendous growth.”

Jenny Proctor, AT&T director of Ecosystems for ASPs, said she has been
watching the ASP emergence for two years and is now seeing the fruition of
AT&T plans.

“Over the course of two years, I’ve worked with a lot of customers and how
to utilize the Internet to help them,” Proctor said. “When the ASP market
first emerged, we found AT&T would benefit it and realized partnering with
ASPs was the primary contribution we could make to the industry.”

A lot of people asked why AT&T didn’t get into application services
themselves, Proctor said, but knew its strength lay in support, not
applications. “We’re not the experts in application services,” Proctor said.

AT&T’s strength, however, lies in its international traffic network and a
customer referral list that can make any company, much less an ASP, drool
in sales anticipation.

All this takes place in the cozy comforts of one of AT&T’s growing number
of data centers worldwide. In April, the telco made a deal with British Telecommunications and Concert to invest $2 billion over three
years for the construction of 44 Internet Data Centers in 16
countries. Eight are up and running and officials said they were well
ahead of schedule with the remaining 36.

Finding a reliable network carrier in the coming year is going to be
crucial for ASPs worldwide. According to a report released by the Gartner
Group
Wednesday, 60 percent of ASPs are forecasted to bite the bullet
by the end of next year. While analysis by research firms are met with
skepticism in the still-developing ASP industry, the finding is cause for
concern.

Even if Gartner is half wrong, nearly one-third of today’s ASP market will
not be around to celebrate 2002. Not much room for error, and losing
business from shoddy connectivity could spell the end for businesses
relying on that support.

Alfred Lutter, Net

Chemistry chief executive officer and recent Ecosystem
inductee, said AT&T’s dependable network is the main reason his company
signed on.

“Our customers, moving literally millions of dollars every day, demand
bullet-proof applications and a rock-solid infrastructure, so when an
application fails it’s more than an inconvenience,” Lutter said. Our
expertise in customer application development for the financial services
sector and AT&T’s commitment to their Web hosting infrastructure, provide
our customers with the closest thing to Web insurance available today.”

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