Survey finds ASP value growing

The Information Technology Association of America (ITAA) released survey findings on Wednesday indicating that customers are receiving a variety of benefits by employing hosted applications and outsourced services.

The poll, conducted this month by the ITAA ASP committee and involving 80 customers spanning multiple industries, found that more than 60 per cent of respondents said the level of service provided by their ASP was either “high” or “extremely high.”

The survey delved into issues such as current use of an ASP, market differentiation, ROI, and performance metrics, said Harris Miller, president of Arlington, Va.-based ITAA.

ITAA customers identified a number of key benefits by choosing the ASP subscription-based route over in-house software implementations, including cost savings, ROI, emergency back-up, access to new technology enhancements, and faster time-to-market results. Presenting data taken directly from positive customer experiences was important to dispel negative or premature assumptions about the turbulent but still evolving ASP market, Miller noted.

“The ASP business has gone through a huge pendulum swing. We had the massive hype two or three years ago, then of course those ridiculous expectations were not met and people were doing obituaries about the ASP industry,” said Miller. “The ASP model is working and there are extremely happy customers out there. [The ITAA] felt this reality check was very useful.”

According to the ITAA ASP survey results, 39 per cent of respondents estimated their ROI existing between 10 per cent and 50 per cent, while an additional 14 per cent placed the marker between 51 per cent and 100 per cent.

Miller said cutbacks and capital expenditure concerns surrounding IT spending has played a definitive role in ASP decision making. Survey respondents acknowledged that cuts in staff, among 81 percent of respondents, and cost considerations for 71 per cent, were motivating factors for opting to select an outsourced hosted solution.

In terms of how customers measure ASP performance, service availability at 74 per cent was shown to be the most often used factor, followed by operational reliability at 45 per cent, and response time at 36 per cent.

Harris said three out of four respondents said that their organization is currently using an ASP for the first time. Companies that are contemplating expanding their use of an ASP were most likely to do so in areas such as database, which 27 per cent of those surveyed elected; accounting/finance, which 23 per cent chose; and e-mail/office productivity, which 19 percent of respondents are considering.

In an attempt to address a major area of customer skepticism still hindering ASP adoption, Harris said the ITAA is developing a survey to address the various levels and relationship between security and the ASP model.

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