[BusinessTeam] collateral quote

Message-ID: <6B75EF096AE0BE428B8CEDEA89C5F632782290@exchange01.lab49.com> · Tue Sep 26 23:06:12 2000 UTC

Study: Global ASP hosting to reach $2.5B by 2004 
by David Legard, IDG News Service\Singapore Bureau 
September 26, 2000, 01:59 	
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The worldwide ASP (application service provider) hosting market will grow
at 62.3 percent annually to reach a total value of $2.5 billion by 2004,
up from $360 million in 2000, according to a study released Monday by
market analyst Gartner Group.

Hosting will account for about 10 percent of a total ASP market of $25.3
billion in 2004, according to Gartner estimates.

ASPs depend on reliable and high-performance networks to deliver their
service to customers, and this puts the Internet hosting players, whose
core strength is network infrastructure, in a strong position to play a
leading role in this market. ASP hosting provides many challenges and
risks, but for many of the carriers the possible rewards in this segment
outweigh the risks involved, Gartner said.

The carriers have been battling in the traditional bandwidth market, where
competition is driving down prices. The carriers need to find a way to
move up the value chain, differentiate themselves from competitors and
find a new revenue stream. The emergence of the ASP market is creating
those revenue opportunities for IP (Internet Protocol) backbone carriers
who provide the infrastructure to deliver these services. The risk is low
because hosting players can rely on conventional hosting revenues while
building up ASP market share, Gartner said.

Demand for hosting translates into demand for backbone services because
hosting centers depend on IP backbones to connect ASPs with customers. It
is therefore a strategic imperative for IP backbone carriers to be
successful in the ASP market because of its enormous growth potential,
Gartner said.

But to be successful in the ASP hosting market, players need to
demonstrate that they can deliver corporate-class applications. This means
they have to engineer their networks to deliver a consistently high
quality service, backed by service level guarantees. Those who can deliver
a premium service will be able to charge premium rates, Gartner said.

Gartner Group, in Stamford, Connecticut, can be reached on the Web at
http://www.gartner.com/.

Luke Flemmer
VP Wireless Business Development
nano
phone: (212) 402-7870
fax:      (212) 430-6374
www.nano.com <http://www.nano.com/> 