Worldwide ASP Market to Surge to $7.8 Billion by 2004

Strategic Insights -

As the ASP market emerges from its infancy, spending on application service provider services is poised for rapid growth. According to IDC, a global IT research and reporting company, worldwide ASP spending in 1999 was just $296 million, but this amount is expected to skyrocket to $7.8 billion by 2004, driven by a 92 percent annual growth rate. The market's growth is being fueled by the increasing maturity of ASP offerings, growing customer awareness, and the endorsement of influential IT industry players such as AT&T, IBM, Microsoft, and Sun.

Key Takeaways:

  • Worldwide ASP spending in 1999 was $296 million, but is expected to reach $7.8 billion by 2004, driven by a 92 percent annual growth rate.
  • Factors contributing to the limited spending in 1999 included the immaturity of ASP offerings and low customer awareness.
  • The ASP concept has been endorsed by influential IT industry players, including AT&T, IBM, Microsoft, and Sun, leading to the development of necessary applications, infrastructure, and services.
  • The most popular ASP applications in 1999 were those related to back-office services, such as HR, accounting, e-commerce, and customer relations.
  • The collaborative and personal segments of the ASP marketplace accounted for just one-third of 1999 ASP spending, but are expected to rise to 50 percent by 2004, driven by growth in messaging and document management, and office suite and consumer-oriented applications.
  • High-speed access and broadband access to the Internet will be key to continued ASP growth.
  • Gaming and entertainment will soon contribute to ASP spending, as more homes get broadband Internet access.

Statistics:

  • Worldwide ASP spending in 1999: $296 million
  • Projected worldwide ASP spending by 2004: $7.8 billion
  • annual growth rate from 1999 to 2004: 92%
  • Share of collaborative and personal segments in 1999: 33.3%
  • Share of collaborative and personal segments by 2004: 50%

Sources:

  • IDC (2000)
  • Newsbytes.com (2000-03-14)
  • International Data Group (parent company of IDC)
  • http://www.idc.com
  • http://www.newsbytes.com