Weekly Review: Where Have All The ASPs Gone?

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The only pureplay ASPs left standing after the effects of this convergence process has run its course will be those who use the Internet to deliver their own software-based business and infrastructure services. Few of these companies call themselves ASPs, either. Rather than delivering applications, they prefer to talk in terms of online business services or Web services. Since Web services are universally hailed as the future of software, we can see that here too the ASP model is destined to prevail, but once again under another name. Thus the iceberg, melting away, becomes the sea.

Setting the Record Straight
Readers frequently write in to follow up points expressed in these columns, and one correspondent last week was right, I feel, to note that I'd "gone slightly from humor to sarcasm on the issue of Microsoft." (See bCentral Takes a Back Seat.) I'm sure Microsoft can take it, but my remarks on the withdrawal of several applications from its bCentral small business portal should not be allowed to obscure the positive efforts it is doing elsewhere to encourage the ASP model, such as the changes to licensing reported last week. (See Microsoft Moves to Help ASPs.)

All the same, it does irk me when big companies, that should know better, come to market with half-baked, ill-thought-out or just plain cynical offerings. They do untold damage when they subsequently and inevitably fail, both in terms of disenchanted customers and negative publicity. The fall-out is worst of all when smaller companies have been encouraged to launch products and services of their own that depend on the larger company's initiative.

I was pleased therefore to see Cable & Wireless continuing to assert its support for the ASP model when it announced last week that it is closing down its a-Services division, which offered hosted Exchange and Office to small businesses. It would be better still had it never launched the experiment in the first place. Here's my analysis, published when the company first announced its plans in alliance with Compaq back in November 1999:

"It is one thing to announce a service, quite another to bring it to market ... both parties may discover they still have much to learn about the business they have just entered."

This review of the week's news highlights is by ASPnews.com founder and consulting analyst Phil Wainewright. A comprehensive news digest is published every month in the ASP News Review newsletter, available exclusively to subscribers.

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