Although the picture points to the imminent demise of some 60 ASPs - due to acquisition, failure or poor business models - Gartner's regional services director Rolf Jester said the market is growing and "will be healthy" in the future. He said those ASPs that did survive will "thrive" on the high demand for renting software online.
To highlight this, Jester said that by 2005 some 30 per cent of Australian enterprises and small to medium businesses will host a quarter of their business applications with ASPs.
Jester said the biggest selling point for an ASP will be its reputation. Organisations seeking to outsource their applications will then look to see that the ASP is reliable, flexible and can deploy applications with total security.
Those Australian companies that opt for an ASP delivery model will use it largely for e-commerce applications, according to Gartner, with some 45 per cent of surveyed companies indicating this approach. This is followed by enterprise resource planning, managing e-mail and customer relationship management.