etako.com sees booming ASP business for SME market in Asia

etako.com, an Applications Service Provider (ASP) that supplies online e-business applications and supports systems to companies in Asia Pacific, has just set up the third regional office in Hong Kong after establishing its first two outlets in Malaysia and Singapore.

etako.com, an Applications Service Provider (ASP) that supplies online e-business applications and supports systems to companies in Asia Pacific, has just set up the third regional office in Hong Kong after establishing its first two outlets in Malaysia and Singapore.
by William Tse

HONG KONG, 24 May 2000 - In an interview with ZDNet Asia, Karen Fukumura, CEO and co-founder of etako.com, pointed out that the fast development of the Internet in the past few years has provided new opportunities for businesses worldwide.

As enterprises incorporate Internet technology into their core business processes, they start to achieve real business value. Today, companies large and small are using the Web to communicate with their partners, connect with their back-end data-systems, and transact commerce.

"We believe that there will be increasing demand for ASP services in Asia, especially for small and medium-sized enterprises (SMEs). It is because the majority of the companies in the region are SMEs, and they do not have sufficient financial and IT resources to get their e-businesses up and running in record time," she said.

Taking Hong Kong as an example, it is estimated that 75% of Hong Kong companies are SMEs, and at least 60,000 of them are medium-sized firms.

"We estimate that more than 80% of these medium-sized companies do not have expertise in Internet technology. There are huge opportunities,"she said.

With the recovery of the Asian economy, more and more SMEs will strengthen their regional operations at a faster pace.

"ASPs can offer low barrier entry for SMEs. Well-armed ASPs can provide a centralized system as well as total e-business solutions for a multiple-site environment. By renting applications to companies online through the Internet, ASPs allow those companies to minimize costs and reduce implementation time. More importantly, ASPs also offer system backup services. All of these are beneficial to SMEs in the expansion of their businesses over the region, for there is still a high cost of end-to-end e-commerce solutions at the moment," Fukumura said.

Aside from fast time-to-market requirement, high cost of end-to-end e-commerce solutions, continuous scarcity of IT resources and regional operations, Fukumura believed that the deregulation of telecommunications in the region would also facilitate the development of ASPs.

"For ASPs, this means that cost will go down quickly while service level will be up with lower marginal cost," she said.

According to a recent report from IDC, the worldwide spending on ASP services will grow to US$7.8 billion by 2004, up from US$296 million last year.

Fukumura deemed that the ASP market for Asian enterprises would be at least US$565 million then.

"However, there is little information in the marketplace about which of the many ASP models suit Asian SMEs efficiently, particularly in B2B e-procurement and marketplace applications, enterprise applications, consulting services and applications management. Therefore, there are lots of room for well-formed ASPs to expand and to penetrate more market segments in Asia," she analyzed.

www.zdnetasia.com
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