But although both these scenarios opened up opportunities for third-party integration, neither opened up wide enough to let in the aggregators. Instead, by bringing in specialist integrators when required, ASPs and their customers were able to maintain a direct relationship instead of introducing an intermediary that left each side feeling isolated and lacking control.

Aggregator to Integrator
Acknowledging these market realities, Jamcracker has evolved over the past year into much more of an integrator itself. Instead of attempting to market a predetermined portfolio of applications, it has moved towards helping larger enterprises integrate their own portfolio of Web-based applications and Web services using its hosted platform — see Jamcracker: More Than an Aggregator. It has migrated from being an ASP aggregator into a Web services integrator.

The change in its business model underlines a point that I've often made in the past — the ASP model is far more than a simple relocation exercise. The naive first-generation view of ASPs envisaged a single-step transfer of applications off the customer site to a provider data center. Aggregators took their place in this naive worldview as providers of pre-engineered integration between discrete applications.

In the more complex real world, Web services are emerging as the new building blocks of online functionality, and the integration and aggregation of Web services becomes not an afterthought, but a necessary prerequisite for assembling of a new generation of adaptable, Internet-centric applications.

The danger for Jamcracker is that, while it is still adapting to this new worldview, others long ago took up residence there and already breathe the air it that environment. Web services integration platform vendor Bowstreet, which last week further strengthened its position by teaming up with Sun, is one example. Though if VC funding is a handicap, Bowstreet labors under a burden that makes even Jamcracker's war chest look like pocket change.

Another formidable yet surprising competitor is Yahoo!, whose enterprise solutions division last week announced a contract with health and retirements benefits company Cigna to implement self-service portal capabilities for all its 16 million plan participants.

All of this activity demonstrates a thriving market, but one which is far removed from the original concept of ASP aggregation. The opportunity is in combining online functionality to create entirely new classes of application and utility. Instead of being a mature, main-street market driven by consumers and small businesses, it turns out this is a pioneering market led by visionaries working in large enterprises — and in many sectors there is a already a tornado of activity developing.