IDC Sees Battle Brewing Between ASPs and ISPs

• 05/02/2000

As the business world continues to change in the Internet age, an increased emphasis is being placed on delivering e-commerce applications and services.

According to a new study released by International Data Corp. (IDC, Framingham, Mass.), the biggest battle for e-commerce projects will occur between Internet service firms and ASPs, some of whom are now offering services built around e-commerce applications.

ASPs and Internet service firms differ in both the types of services and the approach they take. In most cases, ASPs provide minimal customization, thus project time lines are much shorter. On the other hand, Internet service firms deliver custom projects, therefore the project time lines are usually longer than ASPs.

Internet firms offer up-front consulting and design services, ASPs usually do not. ASPs offer ongoing site operation and management, while Internet services firms usually do not. The pricing model is also different, as Internet firms typically require a lump-sum payment while ASPs charge a monthly access rate.

“The end result of the ASP and Internet services firm e-commerce work will be very similar. However, the way each firm reaches this result will be different,” says Meredith Whalen, program manager for IDC’s application service provider and Internet services research program. “ASPs will not necessarily compete on an apples-to-apples basis with Internet firms. The challenge for both types of firms will be in communicating the difference between their offerings. The risk lies in ASPs and Internet service firms trying to be all things to all people. If this occurs, all parties will lose as customers will be confused.”

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