San Jose, California (PRWEB) April 03, 2012
Follow us on LinkedIn Application service provider (ASP) is a third party business that hosts, organizes and deploys application software from centrally located servers through internet on a lease or rental contracts. The market for ASP hosting services is poised to score steady gains in the upcoming years, driven by the trend of companies increasingly migrating from the conventional practice of purchasing expensive licenses to those that can be rented or hired at relatively lower cost monthly subscription fees. Investing financial resources to reduce overheads and save money in the medium-to-long term is the prevailing sentiment in the enterprise IT front. ASP hosting services, in this regard, offer numerous business benefits, such as, lower cost of ownership, negligible capital expenditures and rapid deployment. Leveraging ASP services is therefore emerging into a major strategy for corporate IT departments.
Customer Relationship Management (CRM) and industry specific applications are expected to be the main ASP applications. Industry specific applications, also known as vertical applications, are expected to be key applications for ASPs. Although standardized applications offer the maximum benefit to an ASP, it may not be as beneficial to the customer as customization and integration with existing systems is not possible with these applications. Hence, customized applications for specific industries/ companies are expected to hold the forte in the future. One of the noteworthy strategies for survival adopted by ASPs is the increased focus on developing applications and services with the ability to seamlessly integrate with existing legacy applications. Also, differentiation remains the buzzword for ensuring a competitive lead in the marketplace, and key differentiation strategies include focus on customer service, security features and enhanced multimedia features in addition to emphasis on areas, such as, Email, ERPs and CRMs.
Against the backdrop of an era of rapidly changing business climate, hard to come-by opportunities, extremely short decision making cycles and smaller budgetary outlays at the disposable of companies’ IT departments, the cost advantages of ASP hosting services will continue to come to the fore. The 2007-2009 recession, interestingly provided a launchpad for the rapid uptake of ASP hosting services, given that fact that moving mission critical applications to the ASP model managed by a third party, provides cost benefits that cannot be undermined under tough financial conditions. Budgetary constraints, lack of capital for investments in IT assets, reduced corporate spending and the general strategy of doing more with less, has therefore extended a flip to the market and will continue to do so in the upcoming years given that cost cutting will continue to remain the norm of the future, especially in the developed markets. This is primarily because of the widening government deficits and public debts in developed economies like United States and Europe and the need for spending cuts, which will continue to pose threats to the international financial stability even into the future. Currently however, the economic consequences of persistently high public debts created by governments as a result of a regime encouraged by the flawed framework for assessing how much countries should borrow, is mirrored in the ongoing European debt crisis and its deleterious impact on growth.
Even in the event of the European Union successfully resolving the euro area debt crisis, slower and rather anemic growth will continue to haunt the region even into the future, primarily because the euro crisis in reality masks a deeper financial and economic malaise built through years of unsustainable fiscal policies adopted by profligate governments in the euro zone. Companies and enterprises in all industrial sectors are therefore expected to remain prepared for times of scarce financial resources. This post crisis fiscal pain will magnify the cost attractiveness of ASP services for companies seeking to invest precious resources in sophisticated yet economical IT infrastructure.
Although the impact of the Euro crisis on the IT industry will be undeniable in the event of an escalation in the crisis, the financial repercussions for companies will nevertheless position ASP hosting services as a prime beneficiary of the state of affairs. For instance, the crisis is seen as likely to erode market opportunities in the IT space at large, as a result of possible delays in implementation of new projects and cancellation of projects in pipeline. As witnessed during the US led world economic recession during the period 2007-2009, companies and governments will be forced to do more with less monetary resources. And technologies like ASP hosting services, SaaS and cloud computing are poised to benefit. Companies under the pressure of budget cuts will adopt hosted services as an easy measure of saving money on IT. A less obvious advantage of the Euro crisis is the fact that businesses and enterprise will come out competitive especially in the area of strategic IT spending. In conclusion, as cost pressures build up in the developed countries, ASP hosted services are poised to emerge into one of the few gainers in the myriad vectors that make up the IT industry.
As stated by the new market research report on Application Service Provider (ASP) Hosting Services, United States represents the largest market worldwide. Asia-Pacific is forecast to witness the strongest growth with a projected CAGR of 19.1% over the analysis period.
Major players in the marketplace include Ariba, Inc., HP Enterprise Services, International Business Machines Corporation, Intelligroup, Inc., Jamcracker, Inc., Oracle Corporation, Tata Consultancy Services Ltd., USinternetworking, Inc., among others.
The research report titled Application Service Provider (ASP) Hosting Services: A Global Strategic Business Report announced by Global Industry Analysts, Inc., provides a comprehensive review of market trends, issues, drivers, company profiles, mergers, acquisitions and other strategic industry activities. The single segment report provides market estimates and projections (in US$ Million) for major geographic markets including the United States, Canada, Japan, Europe (France, Germany, Italy, UK, Rest of Europe), Asia-Pacific (China, Hong Kong, Rest of Asia-Pacific), and Rest of World.
For more details about this comprehensive market research report, please visit
About Global Industry Analysts, Inc.
Global Industry Analysts, Inc., (GIA) is a leading publisher of off-the-shelf market research. Founded in 1987, the company currently employs over 800 people worldwide. Annually, GIA publishes more than 1300 full-scale research reports and analyzes 40,000+ market and technology trends while monitoring more than 126,000 Companies worldwide. Serving over 9500 clients in 27 countries, GIA is recognized today, as one of the world’s largest and reputed market research firms.
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