Tech Futures

ASPs

The Basics: Wireless ASPs aren't the only ASPs in the sea. In fact, ASPs in general, which deliver and manage application and computer services from remote data centers for multiple users via the Internet or private networks, are a quickly growing field that's like honey to high-tech entrepreneurs.

Why is this market growing so quickly? According to the ASP Industry Consortium, ASPs offer customers multiple benefits, like sparing them from having to procure and implement complex systems themselves. ASPs also provide financial flexibility and reduced risk. And with no capital expenditure on software, hardware and IT technology, organizations can test new technology with minimal impact in their existing environment.

Background Required: Stephen Lane, a research director of the Aberdeen Group, says you should have a technology background to start an ASP, "because, after all, you're acting like somebody's IT department. You're their CIO or director of operations."

Who: Andrew Feinberg, 30, co-founder

What: NetCracker Technology Corp. , Waltham, Massachusetts

When It Started: 1999

What It Does: offers network inventory management solutions through an ASP model

Why It Rocks: It's already grown to about 150 employees and should add another 100 workers by year-end.


$4
billion: estimated ASP revenues by 2003 in a market set to increase fivefold by 2003
SOURCE: Current Analysis

Feinberg says more companies are outsourcing services in ASPs today for one simple reason: necessity. "Companies lack the resources to build and support technology in-house," he says. "They realize that, to stay cutting-edge, they have to deal with outsourced vendors."

Feinberg adds that cost is another significant motivator for potential clients, as outsourcing "is quite often significantly less expensive in the long-term."

Feinberg is already looking beyond the company's current growth, propelled by its in-house solutions, to all the future opportunities provided by the ASP model, which he considers significant. "We're now dealing with large customers," he says, "but there's a great market in the midsize range, and we plan to aggressively target those companies this year and in the following years."

Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at mcampanelli@earthlink.net.

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This article was originally published in the June 2001 print edition of Entrepreneur with the headline: Tech Futures.

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