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What Can You Expect this Year and Next?

With consolidation of the industry already in progress, there will be an even greater focus on the factors discussed here and the embracing of the role of partnerships with customers more than ever before. If you are looking at an ASP, consider the following priorities, which many service providers are looking to work on during the remainder of 2001 and 2002:

  • Service Level Agreements are just calling cards; partnerships become the real value. For the ASP industry, the role of the SLA is really just a calling card to get in the door of accounts, with the partnerships being the true value of working with an ASP. Corio and Interliant are two companies taking this approach, and software provider OnDemand continues to take this approach with great success.

  • Demonstrated technology expertise. The fact that ASPs have to intermediate between being technology and services companies makes this a point that drives many service-centric companies to seek out partners who can deliver the technological expertise needed. The ongoing development of network operating centers is critical for the growth of this as a differentiator.

  • What's up with wireless? Just like Salesforce.com, the role of wireless has the potential to gain followers in the sales and marketing communities of many industries. However the technological aspects of m-commerce (mobile e-commerce) has yet to gain traction in the United States. You need to make sure your ASP is making plans to participate in this arena when the market matures to its widespread use.

  • ASPs get vertical. The bottom line for ASPs going forward is that they either need to become aligned with telecommunications partners or build significant vertical domain expertise quickly. Clearly, the ASPs that have vertical expertise are getting increasingly higher levels of customers and also are being selected to participate in enterprise-class ASP implementations for their domain expertise.

  • Service pervades over technology. Many companies entered the ASP arena thinking that their technology alone and the fact they delivered over the ASP model would make the entire business model hum along to a $100 million company. The variable of service, so often ignored during the hype phase of this arena, is now part of every surviving ASP's marketing mantra.

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