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Huge Growth in the European ASP Service Market
Growth rate at 91%, say analysts
Although the Western European forecast for spending
on ASP services is 12% less than originally predicted, total spending on
ASP services is still expected to grow from $258 million in 2001 to $6.5
billion in 2006, representing a compound annual growth rate of 91%,
according to IDC.
Although the economic uncertainty in the region continues to impact ASP
spending, there is one upside
- outsourcing, they say.
According to Lars Schwaner, Research Analyst with IDC's European
Software Group, "Cost effective and flexible, outsourcing is booming.
Not just traditional
outsourcing, but new forms of outsourcing that run on shared
infrastructures and pay-per-user metrics."
IDC has noted that ASPs are tying value propositions with the
outsourcing play.
"The large outsourcing 'giants' are borrowing from ASPs meaning that the
term 'ASP' is in no danger of dying. It is recurring in go-to-market
messages across the IT industry."
"The market continues to develop, preserving the model's central tenets,
however (one-to-many, network delivery, service fee based, third party
ownership, and centralization), broadens its appeal across all company
sizes and all types of vendors selling it. For today's ASPs, strategy
cannot remain static. It must tune into the market and adapt," continues
Schwaner.
Principal trends emerging in 2001 affecting the viability of ASPs and
impacting the market forecast
- The economy - the general focus on costs are
lengthening IT sales cycles.
- Propensity to outsource - the emphasis on cost has
pushed outsourcing to the top of the corporate agenda.
- Declining investor confidence - the collapse of
the US venture funded pure play obscures the market
reality in Europe.
- Changing market structure - software and services
firms now push ASP.
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