TOP 50

August 11, 2001

Each month, ASPnews unveils its updated list of the Top 20 ASPs and Infrastructure Providers — companies that are the harbingers of success in the ASP industry.

For August, the list of top ASPs is unchanged. However, the ASPnews team is watching some companies closely in August, so you can expect some changes in September.

Things weren't so quiet on the infrastructure side of the street, where not one but two hosting providers fall off the list. While opportunities have been slow to mature for ASPs, it has been much more of a disappointment for hosting companies.

ASPnews Top 20 Archive

»  July 2001 Top 20  »  June 2001 Top 20  »  May 2001 Top 20  »  April 2001 Top 20

Intel launched Intel Online Services with the expectation that it could prosper from a boom in managed hosting. But after an initial burst of enthusiasm, Intel failed to follow through and lost ASP customers after cutting staff by 25 percent in May 2001. Although Intel continues to support ASPs strongly through its reseller channel and other investments, the negative impact of the IOS cutbacks has not been helpful. Meanwhile further retrenchment seems likely in the wake of the company's continued lowered outlook for revenues and income.

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.

Meanwhile, NaviSite a week ago announced a 25 percent staff cut — including half its VPs — two weeks after the resignation of CEO Joel Rosen. The company has been up for sale since March 2001, but parent incubator CMGI has yet to announce a buyer. Although the company had been adding customers for managed services and for streaming, there was no evidence or likelihood of any increase in its ASP customer base and it had not been marketing itself to ASPs in the previous six months.

NetObjects Represents a New Breed
NetObjects is the most striking addition to the Top 20 Infrastructure Provider list. It is one of a new breed of Web service platform vendors that offers a hosted Web site builder for small businesses that also function as an aggregation platform for third-party Web site enhancement services. Small businesses can therefore build a site using the Matrix platform with embedded functions provided by Miva, MyComputer.com or NetLedger's Oracle Small Business Suite — and all through the same wizard-driven, point-and-click interface.

While other vendors offer similar capabiities — Trellix being the most notable equivalent — NetObjects has the most advanced and innovative platform, and has had notable successes in the European market as well as in the U.S. The clinching factor was its deal announced last week to deliver its desktop sitebuilder bundled with HP imaging devices — significant because NetObjects treats the desktop package not so much as a product in its own right but rather as a vehicle for promoting online services to a wider market.

NetObjects qualifies for this list rather than the ASP list because it is in essence a software vendor. Even though it hosts for many of its private label customers, it gives them an open choice whether they host it themselves or have NetObjects provide the hosting. It also continues to have a substantial installed base of desktop Web site design software, which it still sells as a retail product. So we consider it a software vendor and enabler rather than an ASP in its own right.

Compaq Proves to Be a Solid Provider
Compaq earns its place on the list by backing up a strong track record of supporting and investing in providers with its recently introduced cetification scheme which, unlike others in the industry, is selflessly not tied to a requirement to commit to buy Compaq product. But Compaq needs to watch out as it develops its own Global Services arm that it remains the provider's friend and does not stray into competitive waters just as do IBM and HP do.

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