However, up to 60 percent of all ASPs in the market could fold by the end of 2001, while as much as 80 percent of eventual spending will come from corporate budgets currently allotted to value-added resellers, said Audrey Apfel, vice president and research director, and Benjamin Pring, principal analyst, with the company in a conference call.
"We believe overall that the marketplace is experiencing very high growth," Apfel said, adding that industry consolidation is inevitable. "It will look something like "Survivor," fighting it out on a desert island," she said, referring to the popular CBS TV show.
Apfel also said that current telecommunications firms are the most likely group to acquire or become ASPs. She cautioned, however, that "just because there's a name we know ... doesn't mean they'll be successful."
To succeed, she said, future large players will have to partner with or acquire smaller players with experience in particular areas.
Microsoft's role?
Microsoft might also be an important player, Apfel said. Its entry into the market could provide validity, she said, although "the change will happen with or without them."
The model of thin-client computing, Apfel said, will also have to evolve. Thin-client computing faces problems with scalability and offline status, she said.
Pring used the phrase "substitutive spending" to describe the movement of VAR spending to ASP spending. Also, the industry will cease to use the term ASP and will adopt a term like "Net Services" or "BSP," for business service provider, he said.
Apfel's breakdown of industry growth for the end of this year includes US$2.2 billion for the United States, US$650 million for Europe, and US$700 million for Asia and the Pacific Rim. By the end of 2004, she said, the breakdown will be US$11.5 billion for the United States, US$8 billion for Europe and US$5.5 billion for the rest of the world.
