Aspic claims SMEs are too set in their ways

Paula Hunter, chief market strategist at service management software developer Xevo, has recently been elected chairwoman of the ASP Industry Consortium (Aspic). It's an appropriate name for an industry that, like the quails whose eggs were once set in the savoury jelly of the same name, is struggling to take off.

The consortium was formed in May 1999 to promote the ASP delivery model. The 25 founder members included industry heavy hitters such as Compaq, IBM, Sun, Citrix and UUNet. Aspic now has almost 600 members, representing 30 countries.

The UK is represented by 25 members, but with the bigger players active in global markets, actual representation is higher. The UK committee meets several times each year and has 60 members.

The ASP percentage

The failure of the ASP market to meet predictions for unprecedented growth by industry experts has been blamed on everything from marketing hype to poor technology, low standards of customer care in some cases, and even network managers fearful that outsourcing would make them redundant. Hunter claimed that the dynamics of the software market do not allow for sudden empire-building.

"We've found that there are IT buying cycles that contribute to the pace at which new business models are adopted," said Hunter. "Companies don't buy a new accounting system every year."

She said that meant only a certain percentage of the market was available to ASPs at any one time, and that providers had to keep awareness high so they could strike at the right time.

"It's when enterprises make changes - when they add a new line of business or want to change to a new architecture - that they're likely to consider various applications and methods of deploying them," she said.

Startups willing, but unable

Hunter said the fledgling ASP industry has been weighed down by startup companies eager to take a slice of the cake, but unwilling or unable to provide good service. She singled out startup companies.

"As far as quality of provision is concerned, what I've found is that ASPs which have a history of providing services - whether it be net access or telecoms services - have a very focused effort on service as a means of retaining business," she said.

Some of the newer players have been cutting corners, she alleged, "but quality of service is a priority for all the major players I've been talking to".

The gloomy outlook for ASPs will change as outsourcing becomes the norm in IT, she added.

Embracing a new concept

Aspic believed that when smaller and medium-sized companies see the benefits being enjoyed by their enterprise-class counterparts, the industry will flourish.

"Historically, bigger companies are more comfortable with the concept of outsourcing. It's a new concept for many SMEs. IT outsourcing was not an affordable option for SMEs 10 years ago," said Hunter.

Now that internet access is ubiquitous and datacentre space has become a commodity, SMEs will be able to shop around. But that will not happen overnight.

"There are factors of time and trust to be established before they will consider it," Hunter warned.