An ASP offered to handle any number of applications over the Internet using its own servers. For the young dot-coms short on existing infrastructure and money and for traditional companies saddled with aging, legacy technology, ASPs were a very appealing prospect. But the demise of dot-coms left a lot of dead or dying ASPs in their wake.
The damage is palpable. Customers of now-deceased RedGorilla, an ASP that delivered time-and-billing software over the Internet, get rough treatment at www.redgorilla.com these days. Under the guise of a service to former customers, the site is now actually a hard-sell advertisement from another time-and-billing ASP: Elite.com. Blunt answers in the site's FAQ section tell the story: Will customers get credit for service they paid for? (No.) Will the mobile features work? (No.) But Elite's product is "much more professional." Other notable ASP failures over the past year include Agillion (customer management), HotOffice (virtual office), iSearch (Web-based job recruiting), and Pandesic (e-commerce).
It seems like a bloodbath, but actually, it's just evolutionââ,¬"survival of the fittest. ASPs that debuted without a solid business model are going under or being acquired. "The ASP marketââ,¬"all things consideredââ,¬"did pretty well last year," says Meredith Whalen, vice president of ASP and Internet services research at IDC. "This is an emerging market. Customers spent almost a billion dollars. For an emerging market, that's pretty good."
