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Conclusion and Recommendations

If you're currently working with one or several ASPs, consider the fact that your application(s) now being leased could be integrated into a private trading exchange architecture, as the market dynamics are forcing this change. Additional market dynamics and their implications are defined in the following sections.

Look for Synergies Between ASPs and E-Marketplaces

For both participants and e-marketplace founders, the decision either to participate in or build an e-marketplace is an important choice and requires thoughtful planning and a significant investment of resources. Through their flexible and scalable models, ASPs are already helping to ease the transition, allowing e-marketplaces and their participants to enjoy the benefits of a clearer focus and a faster speed of market with applications and eventually products.

Defining a Core Business Focus

Running a business in today's fast-paced environment is a challenge. Too often, executives find themselves buried in the day-to-day operations of their businesses and are pulled from more pressing, strategic matters. Although an ASP cannot offer all of the functionality required of a maturing e-marketplace, it can alleviate some of the pressure on executives by deploying the more standardized portions as well as hosting and managing the more customized portions of the e-marketplace. The e-marketplace itself thus has the freedom to focus on more pressing business issues such as recruiting participants and establishing strategic relationships. Look to see partnerships between order and content management vendors in the future as this becomes an issue contributing to faster time-to-market for e-marketplace participants.

Driving for Speed to Market

Speed is a critical factor to compete effectively. The Internet and technology in general are changing daily. Businesses feel pressure to execute e-business strategies immediately. Because an ASP has standardized template offerings, implementation can take only weeks instead of months. In particular, e-marketplaces can share some of the underlying functionality such as cataloging, order matching, interfaces to business service partners, and many other functions. For participants, once the necessary data translation tools are in place, enabling participation may be a relatively simple task.

Prebuilt Infrastructure

Running an e-marketplace takes a considerable investment in a reliable, scalable, and secure infrastructure, requiring a considerable amount of capital. Again, an ASP can provide a business with the necessary infrastructure at a fraction of the up-front cost.

Working to Alleviate the IT Staff Shortage Issues

Whether a company is building its own e-marketplace or enabling participation in one, skilled engineers and talent are crucial to a successful execution. Building and managing such a complex system can be a daunting task, especially in the face of recent IT staff shortages. IT departments are already overburdened, so outsourcing a project to an ASP can alleviate staffing problems and allow IT departments to focus on their areas of expertise.

New Pricing Structures

Many companies turn to ASPs to avoid the large up-front capital investment needed to implement a cutting-edge application environment. ASPs typically have an annuity pricing model, such as per user per month. Around their offerings to e-marketplaces, some ASPs are using transaction-based or equity-based pricing models and other methodologies that map to each company's needs. ASPs are also using creative pricing strategies for their services to participants.

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