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The ASP Value Chain
By Phil Wainewright

October 9, 2000

How do you make sense of the ASP industry? The mistake most people make is to put every ASP supplier into a single category labelled 'ASP'. Many different types of provider work together to create each ASP solution, and there are many different types of solution on offer.

To portray all of these variations more clearly, ASPnews.com has created a model we call 'the ASP value chain'. This maps out the various sectors that typically contribute to an ASP solution. They stretch all the way from data centre operators on the Internet backbone, right through to the suppliers of desktop PCs and mobile appliances.

The ASP Value Chain

For a larger, downloadable version of this image, click here. You are free to reuse this copyright image as an aid to discussion of the ASP value chain, provided you acknowledge ASPnews.com as the source.

As the diagram shows, there are five primary sectors that take part in the ASP value chain, represented by the five segments of the circle. The first three - making up the right-hand side of the circle - have direct contact with the user, while the remaining two - making up the left-hand side - stay in the background, as operators of the Internet computing infrastructure.

Service integrators are the providers that end-user businesses recognise as ASPs. They bring together services for delivery as complete, managed solutions. They range in sophistication from enterprise ASPs to Internet portals. This category also includes more traditional types of professional services company, such as e-business integrators and full-service providers.

Application providers create the software and applications from which solutions are assembled. This category encompasses the software developers and independent software vendors (ISVs), whose products ASPs and service integrators deliver. The segment also includes providers who host and deliver their own applications as online services.

Access providers take care of the 'last mile' connection that allows users to access the network. This category includes telecoms providers and Internet service providers, many of whom bundle access along with a basic suite of hosted applications. It also includes wireless ASPs, who deliver Web content and applications to mobile telecoms users.

Infrastructure operators look after the physical backend elements of the network. They include the telecoms providers who act as Internet backbone carriers, as well as colocation and hosting providers, who manage Internet data centre facilities. Another group in this segment provide utility-style computing resources, such as pay-as-you-go storage services.

Infrastructure service providers make up the software and services layer of the Internet computing infrastructure. They include application and ASP infrastructure providers (AIPs), who operate hosting centres that are specially equipped for application hosting. AIPs often work with infrastructure ASPs, who deliver specific elements of the infrastructure, such as billing and metering, directory services, or payment processing. Management service providers, who specialise in remote management of IT systems, are another fast-growing group in this category.

This is the first in a series of articles in the ASP Basics section of the ASPnews.com website. Over the coming weeks, we'll describe each of the value chain participants in more detail, building up a complete picture of the ASP landscape. Other articles in the ASP Basics and Analysis sections of the site will give guidance on how to build relationships within the ASP value chain, both as participants and as end-user businesses.

The material presented here is based on the contents of Internet Application Engines, a new ASPnews.com special report available to order from our Premium Content section.

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