IT Vendors Look to Play in the ASP Market While Avoiding Risks, IDC Says

Apr 16, 2001, 01:00 ET from IDC

    FRAMINGHAM, Mass., April 16 /PRNewswire/ -- Many IT vendors are creating
 ASP migration programs, hoping to reap the rewards that working with
 application service providers (ASPs) can bring while limiting their risks.
 According to IDC, these programs are creatively designed to assist ASPs enter
 the market and prepare to grow their business with a minimum investment from
 IT vendors.
     "As they enter these programs, ASPs need to keep in mind that their
 interests may not be truly aligned with the sponsoring vendor's, since the
 primary purpose of these programs is for vendors to sell more products and
 services to them," said Nicole Weber, senior analyst at IDC. "Unlike
 incubators or venture capitalists, these IT firms are generally not providing
 capital as part of the migration program - or taking equity in lieu of fees -
 and thus are not tied to the participant's financial success."
     For IT vendors, the motivation of offering these programs is the hope of
 establishing a strong future customer base. ASPs enter the programs hoping to
 have their start-up needs fulfilled. However, IT vendors' attempts to avoid
 risks mean they are not providing the ASPs with all the services they require.
     "ASPs should pay particular attention to vendors that will help them
 address business problems - not just technical issues with adopting the ASP
 model," advised Jessica Goepfert, senior analyst with IDC's Application
 Service Provider research program. "For instance, traditional software vendors
 entering the ASP arena probably need assistance with designing an appropriate
 sales force compensation package."
     To attract ASPs, IDC recommends IT vendors with migration programs
 leverage their ability to help them develop and refine their ASP business plan
 and strategize appropriately. IDC also believes providing product development
 assistance and a testing lab will give IT vendors an advantage in obtaining
 ASPs' business.
     In a new bulletin titled ASP Migration Programs: How Vendors Are
 Accelerating Young Companies' Move to the ASP Model (IDC #B24061), IDC
 examines ASP migration programs of the following companies: Allegrix, Cisco,
 Geneer, IBM, and Progress Software. The bulletin analyzes how well the
 programs address the needs of the market and discusses what type of program
 companies entering the ASP space should consider. To purchase this bulletin,
 contact Jim Nagle at 1-800-343-4952, extension 4549, or at jnagle@idc.com.
 
     About IDC
     IDC delivers dependable, high-impact insights and advice on the future of
 ebusiness, the Internet, and technology to help organizations make sound
 business decisions.  IDC forecasts worldwide markets and trends and analyzes
 business strategies, technologies, and vendors, using a combination of
 rigorous primary research and in-depth competitive analysis. IDC provides
 global research with local content through more than 700 analysts in 43
 countries worldwide. IDC's customers comprise the world's leading IT
 suppliers, IT organizations, ebusiness companies, and the financial community.
 Additional information can be found at http://www.idc.com.
     IDC is a division of IDG, the world's leading IT media, research and
 exposition company.
 
    All product and company names may be trademarks or registered trademarks of
 their respective holders.
 
 

SOURCE IDC
    FRAMINGHAM, Mass., April 16 /PRNewswire/ -- Many IT vendors are creating
 ASP migration programs, hoping to reap the rewards that working with
 application service providers (ASPs) can bring while limiting their risks.
 According to IDC, these programs are creatively designed to assist ASPs enter
 the market and prepare to grow their business with a minimum investment from
 IT vendors.
     "As they enter these programs, ASPs need to keep in mind that their
 interests may not be truly aligned with the sponsoring vendor's, since the
 primary purpose of these programs is for vendors to sell more products and
 services to them," said Nicole Weber, senior analyst at IDC. "Unlike
 incubators or venture capitalists, these IT firms are generally not providing
 capital as part of the migration program - or taking equity in lieu of fees -
 and thus are not tied to the participant's financial success."
     For IT vendors, the motivation of offering these programs is the hope of
 establishing a strong future customer base. ASPs enter the programs hoping to
 have their start-up needs fulfilled. However, IT vendors' attempts to avoid
 risks mean they are not providing the ASPs with all the services they require.
     "ASPs should pay particular attention to vendors that will help them
 address business problems - not just technical issues with adopting the ASP
 model," advised Jessica Goepfert, senior analyst with IDC's Application
 Service Provider research program. "For instance, traditional software vendors
 entering the ASP arena probably need assistance with designing an appropriate
 sales force compensation package."
     To attract ASPs, IDC recommends IT vendors with migration programs
 leverage their ability to help them develop and refine their ASP business plan
 and strategize appropriately. IDC also believes providing product development
 assistance and a testing lab will give IT vendors an advantage in obtaining
 ASPs' business.
     In a new bulletin titled ASP Migration Programs: How Vendors Are
 Accelerating Young Companies' Move to the ASP Model (IDC #B24061), IDC
 examines ASP migration programs of the following companies: Allegrix, Cisco,
 Geneer, IBM, and Progress Software. The bulletin analyzes how well the
 programs address the needs of the market and discusses what type of program
 companies entering the ASP space should consider. To purchase this bulletin,
 contact Jim Nagle at 1-800-343-4952, extension 4549, or at jnagle@idc.com.
 
     About IDC
     IDC delivers dependable, high-impact insights and advice on the future of
 ebusiness, the Internet, and technology to help organizations make sound
 business decisions.  IDC forecasts worldwide markets and trends and analyzes
 business strategies, technologies, and vendors, using a combination of
 rigorous primary research and in-depth competitive analysis. IDC provides
 global research with local content through more than 700 analysts in 43
 countries worldwide. IDC's customers comprise the world's leading IT
 suppliers, IT organizations, ebusiness companies, and the financial community.
 Additional information can be found at http://www.idc.com.
     IDC is a division of IDG, the world's leading IT media, research and
 exposition company.
 
    All product and company names may be trademarks or registered trademarks of
 their respective holders.
 
 SOURCE  IDC

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