An Indictment of An Industry

An Indictment of An Industry

from HostingTech.com

The catch is putting all these building blocks together, a task ASPs undertook back in 1997 and have spectacularly failed to accomplish. “The small ASPs have been a dismal marketplace and are likely not going to be around in the near future,” says Andrew Schroepfer, president of Tier 1 Research. Truth be told, Orbitz did try to get out of the mammoth research and development task. It sought out proposals for its back end, but only IBM came back with a bid — one that was well beyond its budget. In the end, they had to do it themselves. This fact is indicative of where the ASP market has gone and how Web hosts now fit — or rather don’t fit — into the large scheme of things.

Observers like Schroepfer note that large system integrators and software manufacturers, such as IBM, Siebel, and Oracle, have all made recent announcements about launching some form of ASP- type services, even as some of the original ASPs like USi, Interliant, and Jamcracker are fading into oblivion.

Translating this trend into the language of the Internet boom goes something like this: System integrators like IBM and EDS are the new MSPs (Managed Service Providers). MSPs, as a category, are a footnote in the history of the dot-com bubble. Established software vendors, such as Oracle and Microsoft, are the new ASPs. The old ASPs are gone. And what about Web hosts? The ones that have banked on first-generation ASPs, such as Interliant, are out of luck. The ones that stuck with strategies offered by the likes of Microsoft are essentially okay, but out of the big leagues — probably for good.

No large system integrator or software vendor has figured out how to recreate the back end that Orbitz built through standardized products and services. Meanwhile, the smaller competitors, including Web hosts, are steering clear of ASP-like projects. Although the opportunity exists, there are no takers, leaving specialty businesses to be their own ASPs.

While large companies are still thinking of the right approach to the problem and smaller and more agile players lack the resources to beat bigger competitors to market, Orbitz seems poised to become an Internet success story at a time when the words “Internet opportunity” sound oxymoronic.

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