We believe enterprise ASPs will only be able to economically offer the level of customization that customers want through vertical market solutions. We believe many enterprise ASPs that are currently organized along various packaged applications will migrate to vertical solution groups over the next 12 months. Of the groups on the pure-play ASP periphery, we believe the SIs have the best chance of success in attacking the market. The key for SIs will be to develop or partner to create a competent ASP offering. In addition, we believe SIs will have an easier time converting their human resources over to the skills needed to deliver an ASP solution.
Pricing remains erratic and too high.
One glaring void of this report is a detailed discussion of the total cost of ownership of an ASP solution versus in-house implementation and ongoing support. The reason for this void is there is no consistent pricing scheme in the market to allow for a uniform example. Moreover, it is clear from the hefty monthly price tags put forth by many of the enterprise ASPs that the total cost of ownership is not much less under an ASP model versus an internal solution. Instead, most ASPs are selling the reduced headache instead of reduced cost at this point. We believe standard and consistent pricing schemas will begin to emerge over the next year, which should serve to mitigate confusion in the market and accelerate adoption.