databyte

December 13, 2000

A report from telecom consulting firm Analysys warns that ASPs are promising too much to customers too soon, and that high-profile failures will damage the industry. Even so, Analysys believes the ASP market will balloon to $82 billion by 2005. Opportunities abound for data center services, connectivity, security, site design, billing, and even the applications themselves, according to Margaret Hopkins, principal analyst and author of the Analysys report. The challenge for ASPs is to keep costs down and achieve economies of scale quickly, while managing customer expectations of services such as broadband access, Hopkins said. The report finds that the most stable model is enterprise ASPs targeting top level corporations. Service level agreements are also critical in addressing customer concerns about security and reliability levels.