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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