However, larger firms are also showing an interest in ASPs as a way of outsourcing selected applications rather than their entire IT operation. The real powerhouse for ASPs is going to be large organisations who don't want to focus on non-core activities,' says David Alexander, director of marketing at Northgate. Some applications are more obviously suited to the use of ASPs than others.
ASPs providing word processing and spreadsheet applications make up only a small part of the market.
The use of an ASP for email is currently popular among smaller businesses, says Barton, but is also gaining ground among corporates. Larger ASPs such as Oracle dominate the ERP segment, which they see as a way of bringing the technology to smaller firms that cannot afford the substantial investment ERP requires. Because no ASP is going to be able to provide all applications, areas of specialism will quickly emerge. Not surprisingly, most ASPs are reluctant to acknowledge that some firms are better off not using the ASP model, arguing that the benefits of handing over non-core elements of the business wholesale to someone else outweigh the disadvantages. If pushed, however, some acknowledge that a firm that has a number of proprietary software systems will find the cost of going over to an ASP prohibitive.