New Demand Commentary

Much of the impetus for Application Service Providers arose from the common needs of individuals and small businesses to establish a web presence - people needed web sites, email, and shared files to interact online.

Many first generation web hosting providers attempted to lock-in customers with limited, pre-defined services, or even create "walled gardens" limiting internet access. Under the pressure of global competition, and the increasing desire of customers for more expressive services - blogs, podcasts, mash ups - the rigid, limited capabilities of the early ASPs are being replaced by web-based software services. Instead of purchasing disk space and User IDs on an ASP vendor's shared hardware platform, customers request shared services over the web, without regard for the physical implementation or software environment of the service provider.

As this world of web services grows and basic services are commoditized, traditional measures of vendor capabilities will be replaced by more consumer oriented ones. Brand, fashion, and price will become more important than technical capabilities to a mass audience - web service providers will need to follow the IPOD path to success.

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last updated 2 years ago #