ASP Industry Consortium Chairman Lauds IDC Study as Proof of Model's Benefits; ROI Study Distributed to All Members of Global Consortium.

Business/Technology Editors

FRAMINGHAM, Mass.--(BUSINESS WIRE)--Oct. 10, 2001

The chairman of the Application Service Provider (ASP) Industry Consortium today pointed to a new study from analyst firm IDC as proof of the significant financial benefits gained by users of the ASP computing model.

The IDC report, The Financial Impact of ASPs, found that using the ASP model generated an average five-year return on investment (ROI) of 404 percent. According to Paula Hunter, Vice President of Marketing with Xevo Corporation and Chairman of the ASP Industry Consortium, the study serves to substantiate the industry's claims regarding the financial advantages of the ASP model over traditional forms of computing.

"For over two years now, we in the industry have been talking up the bottom-line benefit of utilizing the ASP model," Hunter said. "IDC has now provided solid proof that using an ASP not only results in quicker time-to-application and a fractional up-front investment, but that it provides a sizeable savings in the long term." Hunter also said that the report, which is being distributed to all members of the ASP Industry Consortium, provides "an important tool to help customers understand the value of application services."

The IDC study investigated the return on investment realized by organizations that have successfully implemented and utilized ASP-delivered application services. It included 54 in-person interviews with IS managers, business managers, department managers, and system users spanning a range of industries.

Among the studies other key findings were:

--ASP implementations generated an average five-year ROI of 404 percent, and almost half of the organizations in the study had payback within six months.

--44 percent of the organizations included in the study experienced an ROI greater than 100 percent, while 12 percent reported ROI returns of over 1,000 percent.

--The average payback for an ASP outsourced solution was 1.33 years on an average total investment of $4.2 million. The average initial investment was $399,000.

"The `return' in return on investment will mean something different to every company," said Meredith Whalen, VP of IDC's ASP and Internet Services research. "Quantitative and measurable benefits provide proof of success, however ASP customers frequently cite peace of mind, an ability to focus on their core business, and a better work environment as equally valuable benefits of working with an ASP. Equipped with both quantitative and qualitative benefits, decision-makers can be better assured of sound business judgments."

IDC employed a case study technique to collect information and build several financial models focusing on an ROI measure. In addition to these models, qualitative background information was collected to help the interviewers understand the factors contributing to success in each installation. For more information on The Financial Impact of ASPs, contact IDC's Beth Freedman at [e-mail] or Lisa Bloom at [e-mail] or by phone at [phone].

About IDC

IDC is a leading global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. More than 700 analysts in 43 countries provide global research with local content. Additional information can be found at www.idc.com.

About the ASP Industry Consortium

The ASP Industry Consortium is the global advocacy group formed to promote the application service provider industry. Information on the ASP Industry Consortium - including a full list of member companies - is available at www.allaboutasp.org or by contacting the Consortium's headquarters at: ASP Industry Consortium, Inc., 401 Edgewater Place, Suite 500, Wakefield, Mass. 01880; Tel: [phone]; Fax: [phone]; e-mail: [e-mail].