Gartner Research

AMR Outlook: The Application Service Provider (ASP) Arena: It's Time for a Reality Check

Published: 02 May 2000

ID: G00191258

Analyst(s): David Boulanger, David Caruso


The initial value premise of the ASP model was simple--ASPs would host an application and provide it on a rental basis. In other words, outsource the technical operations. Recent market sizing work by AMR Research indicates that this model has garnered very little end user spending. Trying to find the right model to spur growth, ASPs have sped through an incredible maturation process over the past year. AMR Research has seen numerous service and delivery models, and a slew of partnerships announced and consummated. However, only a small number of ASPs anticipate the convergence of hosted applications, value added services and new e-business models that could propel application service provision to consistent participation in enterprise application deployment. It is the notion of outsourced business processes--complete solutions much like payroll or contract manufacturing--which begins to create a new and viable justification for ASPs.

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