Brazil's Nascent Application Service Provider Ecosystem Depends on Niche Application and Network Infrastructure Development Through 2003, According to the Yankee Group.

Business/Technology Editors

BOSTON--(BUSINESS WIRE)--July 19, 2001

Most players in the Brazilian application service provider (ASP) ecosystem had a challenging year in 2000. Independent software vendors (ISVs), hosting service providers, and network service providers are still exploring industry and company needs, as well as the partnership consortia necessary for application service delivery in Brazil. The early stage of evolution in Brazil has meant slow ASP rollouts.

The new Yankee Group Report, "Brazil's Nascent Application Service Provider Ecosystem," introduces the market dynamics facing ASPs in Brazil, while providing some lessons from trends in more mature markets and discusses major challenges impacting service providers' marketplace, such as last-mile service level agreements, channel conflicts between major package software vendors and ASPs, and data privacy and trust.

Although the ASP market in Brazil has not been stellar, we believe that there is enormous potential, though certain key factors will differentiate ASP players attuned to the market in Brazil. According to Luciana Hayashi, senior consultant for the Yankee Group's Internet Strategies Latin America research and consulting practice, "ASPs should offer niche applications that are difficult for users to provision and maintain internally, particularly applications for heavily regulated arenas in Brazil. ASPs should focus on hosted applications for human resources management for monthly reports, statistics, and compliance measures necessary to meet Brazil's strict legal requirements for HR administration and reporting."

She also adds, "ASPs must focus on vertical market scalability. Since one of the premises of an ASP is to offer package solutions with very little customization, to be profitable ASPs will need to focus on scalability. This is a challenge since corporate clients demand customization since it is differentiation that creates their core competitive advantages."

NOTE TO EDITORS: For more information or to schedule an interview, please contact Luciana Hayashi at [phone] or [e-mail].

The Yankee Group (www.yankeegroup.com)

As a global leader in technology research and strategic consulting, the Yankee Group provides accurate, reliable, and trusted research; custom consulting; and personalized one-to-one client interaction encompassing all areas essential to e-business success: Internet, electronic commerce, communications, wireless, computing, and enterprise applications. Established in 1970 and headquartered in Boston, the company maintains offices throughout North America, Europe, Latin America, and the Pacific Rim.