Analysys predicts slow progress in the ASP revolution

For most companies, the ASP revolution will have to wait until 2003, according to telecoms consultancy Analysys.

"The problems of unbundling by BT, the technical difficulties in rolling out ADSL and getting the funding due to the current reaction to telco stocks mean that it will mainly be large companies using ASPs for the next two years," said Margaret Hopkins, analyst at Analysys and author of 'ASP: Business Model and Application. Hopkins believes that SMEs will only embrace the ASP model when they can be always on at a reasonable price. At the beginning of this month, BT announced that: it had 14,000 ADSL users; had converted 619 exchanges covering 40 per cent of the UK's homes and businesses and by March 2001 it will cover 50 per cent and have around 80,000 customers. "You can have a pan-European infrastructure and all of the rest needed to get ASPs going, but if you don't have that last mile of wide pipe and bandwidth the lower end of the market will not take it up," said Tim Dillon, analyst at Current Analysis. "There are a lot of ASPs attacking that lower end of the market. It makes a lot of sense for them and for the customers who don't want to be burdened with IT technicalities," said Nick Greenway, analyst at Datamonitor. "But it won't happen with dial up, it will have to wait for 'always on'". Analysys predicts that the global ASP services market could top $82bn by 2005 and that profitability will be achieved by most ASPs in six years. But it warned that service level agreements were 'still a problem in search of a resolution.'.