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Application service Providers (ASPs) have been one of the hottest sectors in the Internet services market during the past two years. Yet, like pure-play dot coms and Internet professional services companies, ASPs have lately come under fire.
ASPs represent a concept of delivering software as a service. The problem for pure-play ASPs is that simply delivering someone else's software does not necessarily create a long-term sustainable business model, especially since the delivery process itself has, in some cases, been piecemeal and poorly implemented. During the next three to five years, all software will be available as an on-demand service. However, that does not imply that pure-play ASPs will be the only ones delivering that service.
There are three flaws in the basic ASP model. First, applications are packaged individually and discretely when users need integrated application bundles. Next, little application customization is provided. And finally, applications are not integrated into existing operating environments/core systems.
Existing ASPs and emerging players are attempting to develop extended and complementary offerings to the basic ASP model. This has led to, among other things, a proliferation of often conflicting and confusing "SP" variations.
As a result,...