Customers demand for a turnkey solution is real. ASPs just need to start setting realistic expectations for what these services cost. Unlike buying a widget over the Web at less than cost in a one-time transaction, when an ASP goes out of business, so goes a customer s ability to transact business. Many of these users never stopped to think about what would happen to their data when their ASP went down. When someone offers an extranet service for less than the price of an AOL account, potential clients should go running for the hills.
Investors also deserve a big slice of the blame pie.
Forcing companies to focus on their market valuations, rather than on serving their customers, is not the way to build a healthy business. Keep in mind that there are a number of serious players in this field who have been doing the right things business-wise. I m writing about those who have missed the point that a business has to at least pay for itself. Taking a look at the landscape today, the companies that maintained realistic fees are the ones who are surviving. Those companies that understand what it takes to deliver a stable product with regular enhancements are surviving.