Communications, Business Apps are Most Common Accessed From ASPs; ASP Industry Consortium Releases Fourth of Quarterly Tracking Studies.

Business/Technology Editors

WAKEFIELD, Mass.--(BUSINESS WIRE)--Feb. 1, 2001

Communications, financial/accounting and e-commerce offerings remain the most common types of applications being accessed from an application service provider (ASP), according to the results of the latest customer tracking survey released today.

The survey, the fourth in a quarterly series for 2000, was commissioned by the ASP Industry Consortium, an international advocacy group of companies formed to promote the application service provider industry by sponsoring research, fostering best practices, and articulating the benefits of the ASP delivery model. It was performed by Zona Research, Inc. at the direction of the consortium's Research Committee, which is chaired by Sheila Lugenbuehl of Hewlett-Packard.

The sampling was done of 137 senior and executive level managers and IT professionals in the U.S. who have purchasing authority for or involvement with general office productivity or software, and who have indicated that they are either currently using ASP services or plan to in the next 12 months.

Communication applications - such as e-mail, messaging and groupware - were cited by 33.6 percent of the respondents when asked what types of applications are currently being accessed from an ASP.

That was followed by financial and accounting applications at 24.8 percent; E-commerce - including catalogs, transactions and billing - at 21.2 percent; customer service or customer relationship management (CRM) at 19 percent; education and training at 18.2 percent; human resources at 13.1 percent; project management at 9.5 percent; sales force automation at 8.8 percent; personal productivity (word processing, spreadsheet, presentation, etc.) at 8.8 percent; enterprise resource planning (ERP) at 3.6 percent; virtual trading communities at 3.6 percent; and supply chain management at less than 1 percent. Multiple responses were allowed.

The commonality of use of application sets remained largely consistent throughout the four quarters that the tracking survey covered.

"One measurable benefit of using ASPs is that they allow end users to focus their IT resources on their core competencies rather than worrying about things like whether everyone's e-mail is up and running," noted Lugenbuehl. "That benefit certainly seems to be borne out by the results of our tracking surveys."

But the surveys also show what a valuable business tool ASPs are becoming, by virtue of the number of respondents using financial, accounting and E-commerce applications through an ASP, she added.

The top-line benefits of ASP also appear to be emerging among end users, according to the fourth quarter survey. For each of the first three quarters, respondents cited a reduction in the total cost of ownership as the leading factor influencing the ASP purchase decision. While cost still ranked as very important, more respondents in the fourth quarter survey cited the fact that ASPs enable them to focus on achieving strategic business objectives, as well as enable them to more quickly implement new applications. Also cited more often than cost was the fact that ASPs allow for the freeing of IT resources to focus on internal mission critical applications.

Other key findings of the latest survey included:

- Security remains the number one concern among respondents when asked to rank
the importance of potential issues that could arise from using an ASP. Some 61
percent ranked "security of my data may be compromised" as the most important
potential issue, followed by "unacceptable application performance" at 53
percent. Those findings remain relatively unchanged from the first quarter
2000.

- The vast majority of customers remain satisfied with their ASP services, as
reflected by the 92 percent who answered in the affirmative when asked if their
current service level agreement (SLA) meets their needs. That finding was
reinforced by the average response time for the ASP to address support issues.
Thirty-five percent said the response time was between one and four hours,
while 32 percent said response time was 15 minutes to one hour. Another 17
percent put response time at less than 15 minutes.

Results of the ASP Industry Consortium's custom research are available free of charge to all Consortium members through its web site, www.allaboutasp.org.

About the ASP Industry

An application service provider manages and delivers application capabilities to multiple entities from data centers across a wide area network. ASPs give customers a viable alternative to procuring and implementing complex systems themselves. In some cases, ASPs even provide customers with a comprehensive alternative to building and managing internal information technology operations. ASP customers also are able to control more precisely the total cost of technology ownership through scheduled payment schemes. Though the ASP market is relatively new, computer industry analysts foresee rapid growth and multi-billion-dollar annual sales within the next few years. End users cross industry lines and include anyone from the small office/home office (SOHO) client to large corporations and from complex businesses to specific verticals.

About the ASP Industry Consortium

The ASP Industry Consortium is the global advocacy group formed to promote the application service provider industry by sponsoring research and articulating the strategic and measurable of the ASP delivery model. The Consortium numbers more than 750 members in 30 countries worldwide. Its goals include educating the marketplace, promoting best practices, developing common definitions for the industry, as well as serving as a forum for discussion and sponsoring research. Among the technology sectors represented among the ASP Industry Consortium membership are Independent Software Vendors (ISVs), Network Service Providers (NSPs), Application Service Providers (ASPs), as well as emerging business models and other sectors supporting the 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].