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A Winning Combination: Software-as-Services Plus Business Consulting and Process Services
By Laurie McCabe
January 30, 2004

This month sees three changes to our Top 20 lists, making February one of the more tumultuous months so far in the history of the ASPnews Top 20. Shifts in the balance of power among infrastructure providers have led to the departure of two software vendors from our infrastructure list, while there is one change to the Top 20 ASPs list.

ASPnews Top 20 Archive
»  January 2002 Top 20 
»  December 2001 Top 20 
»  November 2001 Top 20 
»  October 2001 Top 20 
»  September 2001 Top 20 
»  August 2001 Top 20 
»  July 2001 Top 20 
»  June 2001 Top 20 
»  May 2001 Top 20 
»  April 2001 Top 20 
With two Chapter 11 filings taking place among our Top 20 ASPs last month, a change for February is inevitable.

Last month, we warned that we would be re-evaluating USinternetworking based on its recent Chapter 11 filing. After further review, USi has retained its place on the list, despite the negative impact of a bankruptcy that wipes out the value of shareholders’ investments,

To USi’s credit, it has already filed its reorganization plan with the court, signaling its intent to move rapidly through the Chapter 11 process and emerge on a sound financial and operational footing. In the meantime, it continues to maintain services for its customers and to bring forward new service offerings. USi remains among the world’s largest and best-known ASPs and it is moving purposefully through its current difficulties. While we will continue to monitor its progress, we still rank the company as a Top 20 ASP.

What is the ASPnews Top 20?
All entries in the Top 20 ASPs and the Top 20 ASP Infrastructure Providers lists are drawn from the ASP Industry Global 200 Directory, as published monthly by ASP News Review, the executive newsletter for the worldwide ASP and Web services industry.

The companies are selected based on several factors. Sheer size is just one parameter, which is weighted along with more qualitative assessments, such as respect among peers and talent to innovate within the ASP model as defined by ASPnews (see The ASP Value Chain for a detailed description).

For more on the process behind the Top 20 lists, see Global Top 20 — Your Questions Answered.

FSPs and ASPs Don’t Mix
Agilera’s decision to push Applicast, the Menlo Park, Calif.-based SAP and Siebel Systems ASP it acquired a year ago, into a belated Chapter 11 filing last week, has completed a process that was already visible last summer. The filing may not have grabbed the headlines of USi’s bankruptcy, but it has significant implications to the business model of Agilera (see Applicast Files for Bankruptcy).

Agilera has always pursued a “full-service provider” model, meaning that it offers a mixture of systems integration, application management and outsourcing. Its pure ASP offerings have been a dwindling proportion within this mix. The closure of the Applicast unit confirms that the ASP model is no longer core to its business. The decision appears to be a prudent business move for the company, but it does necessitate Agilera’s removal from the Top 20 ASP list.

Replacing Agilera is Salesnet. The company has been making rapid progress with its hosted sales automation solution, and now joins those other two SFA giants, Salesforce.com and UpShot, in the higher echelons of the ASP firmament. (See Salesnet Soaring in SFA.) Salesnet’s success is a tribute not only to the well-judged feature set of its offering, but also to the excellent fit between the online delivery model and sales automation applications.

Infrastructure Trends
Two data center giants join the infrastructure Top 20 this month. First is Cable & Wireless, which has just closed its acquisition of Exodus. Despite its data centers being home to many ASPs, Exodus as an independent entity was never a candidate for inclusion in the list because it showed no real interest either in supporting ASPs or in providing a robust infrastructure for online applications. Cable & Wireless is a complete contrast. (See Cable & Wireless on Exodus Strategy.)

Cable & Wireless believes in the ASP model, and it is already promoting Web services-ready infrastructure through its Digital Island subsidiary. With that kind of commitment behind the combination of its existing global Internet backbone and Exodus’ data center assets, Cable & Wireless has become one of the industry’s most influential infrastructure players.

Also joining the infrastructure provider list is outsourcing giant EDS, a company that has made several previous attempts to become a key player in the ASP industry. Its admission to the Top 20 list this month confirms that it has finally achieved its goal. The January announcements of partnerships with ASPs Captura and Mi8 show that EDS has begun to deliver what ASPs need from its huge global network of data centers. EDS is learning how to partner with ASPs rather than selling its own competing services.

Cable & Wireless and EDS replace software companies Lawson and Onyx in the listing. Although both vendors continue to support ASP partners, their commitment no longer stands significantly above that of many of their peers in the software industry. The bar for inclusion in the Top 20 has moved up, and few application vendors now have the resources to match the influence of large infrastructure players and platform vendors in the ASP and Web services landscape.


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