ASP - Quicksilver Rather than Gold?

As a Californian [19]99er, the temptation to make or extend Gold Rush analogies is so overwhelmingly tempting that only huge willpower has enabled me to resist since my move to San Francisco. Today I have succumbed. Please forgive me.

Conventional wisdom in the last few years has had it that, in the world of "e", it is better to be a Levi Strauss than a James Marshall. The thinking has gone that makers of picks and shovels and of rugged denim trousers - the eponymous Mr Strauss - end up swathed in luxury on Nob Hill. Actual gold diggers - Marshall was the first to find nuggets high in the Sierra Nevada - finish their days huddled over a glass of Bourbon in towns like Brody. Cisco's bull run and declining dot-com prices have added credence to this view.

This thinking has in recent months permeated the world of "ASP". Countless suppliers of ASP offerings now take the line that that they are enablers of the ASP wave; that they have one or more ingredients that will make the ASP proposition work, while at the same time they are not strictly themselves an ASP. "We're building the infrastructure to allow ASP provision"; "we have a billing tool for ASPs"; "we can integrate disparate ASP-delivered applications".

Far fewer suppliers are now coming to the market stating that they themselves are or intend to be the retail ASP. Following the same logic by which B2C suppliers are now seen as less fashionable than B2B providers, suppliers operating within somebody else's ASP supply chain are seen to be well positioned to exploit the ASP. Those actually trying to get end-users on-board are - whisper this bit - regarded as having a tough hill to climb.

The simple fact is demand for the ASP model seems to be less pervasive than many of its leading protoganists would have you believe. End-user interest is not translating into skyrocketing quarterly results. Maybe I'm missing something but doesn't Corio's prospectus - genuine ASP revenues of under $1m in 1999 - suggest that the hype has after all been somewhat in advance of the reality? (USi's far greater revenues are genuinely impressive but it is hard to find other providers in this league).

If this analysis is correct and the ASP rush isn't going to uncover gold, then aren't all those suppliers making the picks and the shovels and the jeans going to find the going tough when the suckers stop riding into town to stock up before heading off into "them thar hills"? The first wave of miners will quickly move on - using whatever capital they have been able to accumulate (selling a stake was the ninteenth-century equivalent of an IPO) - and start the search for the next Shangri-La. The Next New New thing.

After the 1849 stampede was all but over, the last few remaining prospecters came across something they called Quicksilver. This they claimed was even better than Gold. They did find a market for it, but it turned out to be a pretty small niche; making thermometers work. Quicksilver as we all now know was just a boring old mineral called Mercury.

Maybe the ASP wave is just the search for Quicksilver in the wake of the "e" gold rush. Maybe the hills are really barren after all and the skeptics sitting in the bars of the Barbary Coast had it right all along.

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