Future Trends

The research firm of IDC expects the ASP market to by 92% over the 5-year period 1999 to 2004 to an estimated $7.8B in 20041. However, this forecast represents a drastic reduction from the earlier estimate of Gartner Research Group, who predicted that the market would be around $22B (Mears, 2003). While there are many different estimates on ASP spending, it should be noted that all of them have revised their estimate downward from the projections made in late 1990s.
A possible reason for the downward revision of ASP spending could be due to the crash of many dot-com firms in early 2000. In late 1990s, many firms entered the ASP market with a lot of fanfare and with the expectation that the premise behind their business model of customers renting software applications over the Internet would hold true. However, the collapse of the dot-com firms in part has lead to the demise of many ASP. Those that do remain can be considered as the survivors. This second generation ASP have altered their business model and have changed their tactics to provide more and high quality offerings and superior service.