Local ASPs have a good chance at $22.4b market

Australian application service providers (ASP) are well placed to expand into the international IT economy, according to an industry advocate.

"Outside North America, Australia has the fastest growing ASP sector. There are more ASPs [in Australia] than in Europe, Japan, Singapore and Hong Kong," said Traver Gruen-Kennedy, chairman of the ASP Industry Consortium and director of advanced business development, Citrix Systems.

"Australia, to some degree, has taken a leadership position."

The ASP revolution has "the promise for software and IT [in Australia] to gain momentum on a global basis", he said.

By 2003 the ASP market will be worth an estimated $US22.4 billion, compared with $889 million in 1998, according to Gruen-Kennedy.

He said Brisbane-based ASP, Tequinox (formerly Mincom) was an example of an Australian ASP with global potential.

Tequinox, which specialises in applications for the mining industry, is hosting applications from its Brisbane data centre for users in Chile and Europe, Kennedy-Gruen said.

Around 150 companies worldwide have adopted an ASP model based on running applications from a data centre, Gruen-Kennedy said. He estimates there is the potential for "tens of thousands" of ASPs in the marketplace in the future. Many companies have also adopted a similar hosting model which is based around browser and Web-application servers, he said.

In Australia, there are currently about 12 ASPs, but many companies are moving into the space, he said.

"It's safe to say there are many companies who fully understand the [ASP] business model, but a lot of companies don't understand and don't want to be left behind."

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